If a firm’s variable costs per unit increase,the firm’s ________. A) financial breakeven point will decrease B) operating breakeven point will increase C) sale price per unit will decrease D) fixed costs per unit will increase ANSWER B
Date: September 19th, 2020
If a firm’s fixed financial costs decrease, the firm’s operating breakeven point will ________. A) decrease B) increase C) remain unchanged D) change based on the sale price per unit ANSWER C
Date: September 19th, 2020
Your firm borrows money from the bank on a short-term note due in 9 months. This type of financing would be most appropriate for which of the following activities? A) The support of accounts receivable B) The construction of a new warehouse C) The support of accounts payable D) The financing of new equity […]
Date: September 19th, 2020
In a world with taxes, M&M’s second proposition defines the expected return on equity as: A) Ke = Ku + (Ku – Kd) (1 – t) ( ) B) Ke = Ku + (Ku + Kd) (1 – t) ( ) C) Ke = Ku + (Ku – Kd) (1 + t) ( ) D) […]
Date: September 19th, 2020
The interest tax shield is equal to: A) $0 B) (EBIT – I ) * (1-the tax rate). C) (equity + debt) * (1-the tax rate) D) the tax rate multiplied by the amount of interest. ANSWER D
Date: September 19th, 2020
All of these social factors can give managers further insights into the opportunities and risks facing a particular industry EXCEPT: A) aging of the population. B) new technology developments. C) greater health consciousness. D) obesity concerns. ANSWER B
Date: September 19th, 2020
If a firm’s sale price per unit decreases, the firm’s ________. A) operating breakeven point will decrease B) operating breakeven point will increase C) variable costs per unit will decrease D) variable costs per unit will increase ANSWER B
Date: September 19th, 2020
Which of the following is NOT considered a source of short-term financing? A) a 10-year bond B) a banker’s acceptance C) a 90-day bank loan D) an issue of commercial paper ANSWER A
Date: September 19th, 2020
Which of the following statements comparing preferred stock to other financial instruments is NOT true? A) Like common shares, preferred dividends are after-tax payments for the firm. B) Like bonds, preferred shares are issued with a face value. C) Like bonds, most preferred shares have maturities of up to 30 years. D) Like common shares, […]
Date: September 19th, 2020
The prime rate of interest fluctuates with ________. A) the changing supply-and-demand relationship for long-term funds B) the changing supply-and-demand relationship for short-term funds C) the liquidity requirement in a money market D) the demand in a bond market ANSWER B
Date: September 19th, 2020
