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
A PEST analysis involves an analysis of which of these factors? A) Technological, societal, economic factors, and potential threats B) Societal, technological, political, and economic factors C) Strengths, threats, economic and political factors D) Strengths, threats, potential opportunities, and external environment factors ANSWER B
Date: September 19th, 2020
Breakeven analysis is used by a firm ________. A) to determine the level of operations necessary to cover all fixed operating costs B) to determine the least cost of producing goods and services C) to evaluate the profitability associated with various levels of sales D) to determine the demand of a product ANSWER […]
Date: September 19th, 2020
What are the Earnings after tax for the Equity and Debt firm? A) $240,000 B) $300,000 C) $560,000 D) $0 ANSWER C Explanation: C) EAT = EBT – Taxes Payable = $800,000 – $240,000 = $560,000.
Date: September 19th, 2020
Which of the following are the three basic ways of lending unsecured, short-term funds by commercial banks? A) mortgage-backed securities, T-bonds, and commercial paper B) single-payment note, lines of credit, and revolving credit agreements C) T-bills, municipal bonds, and commercial paper D) commercial paper, real estate bonds, and corporate bonds ANSWER B
Date: September 19th, 2020
