Which of the following is NOT considered to be one of Michael Porter’s Five Forces? A) Threat of new entrants B) Bargaining power of suppliers C) Threat of substitute products or services D) Diminished rivalry among current competitors ANSWER D
Date: September 19th, 2020
________ refers to the effects that fixed costs have on the returns that shareholders earn. A) Purchase power parity B) Leverage C) Business risk D) Pecking order theory ANSWER B
Date: September 19th, 2020
________ costs are a function of time, not sales, and are typically contractual. A) Fixed B) Semi-variable C) Variable D) Operating ANSWER A
Date: September 19th, 2020
Commitment fee is the fee that is normally charged on a revolving credit agreement. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The major type of loan made by banks to businesses is the ________. A) fixed-asset-based loan B) short-term secured loan C) short-term, self-liquidating loan D) capital improvement loan ANSWER C
Date: September 19th, 2020
Stage 2 of the industry life cycle is characterized by all of the following EXCEPT: A) there is little demand for the company’s products and services. B) the firm’s revenue tends to grow rapidly. C) positive profits begin to materialize. D) private firms begin to “go public.” ANSWER A
Date: September 19th, 2020
Other things equal, it is more desirable to have a larger working capital gap. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Bond rating agencies: A) assess the credit worthiness of the firm. B) assess the possibility of default by a firm on the payment of its bonds. C) include firm’s such a Moody’s and Fitch. D) all of the statements above are true. ANSWER D
Date: September 19th, 2020
A major benefit to firms that rely on accounts payable as a source of short-term financing is that it can defer payment of goods and services received. A potential cost is that the firm might be foregoing discounts for early repayment. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Stage 3 of the industry life cycle is characterized by all of the following EXCEPT: A) competition intensifies as more and more firms enter the industry. B) there is little demand for the company’s products and services. C) revenues continue to grow, but at a slower pace. D) firms become more efficient at maintaining costs. […]
Date: September 19th, 2020
