Your firm issues 20-year bonds. 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 inventory ANSWER B
Date: September 19th, 2020
Intense rivalry among existing firms can result in: A) the introduction of new products or services. B) lower profit margins as competitors jockey for position. C) decreased capacity. D) Both A and B. ANSWER D
Date: September 19th, 2020
Which of the following have payments that are tax deductible for the corporation? A) bond interest payments B) preferred dividends C) common dividends D) retained earnings ANSWER A
Date: September 19th, 2020
What type of risk is assessed by credit rating agencies? Do these agencies generally assign individuals or teams to assess a firm’s risk? What are some of the ways the rating agencies are paid for their services? What will be an ideal response? ANSWER Credit agencies for the most part assess a firm’s […]
Date: September 19th, 2020
A single-payment note generally has a maturity of ________. A) 30 days to 9 months or more B) 10 to 12 months or more C) 12 to 24 months or more D) 10 to 24 months or more ANSWER A
Date: September 19th, 2020
At the operating breakeven point, ________ equals zero. A) sales revenue B) fixed operating costs C) variable operating costs D) earnings before interest and taxes ANSWER D
Date: September 19th, 2020
Use the information for Silicon Solutions found in Figure 11.1 and assume perfect capital markets (PCM) to determine the average cost of capital for the unlevered firm. Then determine the return on shares, the return on debt, and the average cost of capital for the levered firm. What do you think will happen to the […]
Date: September 19th, 2020
Which of the following is TRUE about the threat of substitutes? A) When threatened by substitutes, existing competitors will increase their prices. B) innovation makes an existing product or service more attractive to its customers. C) If there are numerous substitutes, the firm’s profit margins and revenues will decline. D) If the competitors are strong, […]
Date: September 19th, 2020
Managing inventory involves trading off the benefits of availability with various financial concerns such as storage, insurance, and obsolescence. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A loan that is usually a one-time loan made to a borrower who needs funds for a specific purpose for a short period is called a ________. A) term loan B) bill of exchange C) mortgage loan D) single-payment note ANSWER D
Date: September 19th, 2020
