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
________ results from the use of fixed-cost assets or funds to magnify returns to a firm’s owners. A) Long-term debt B) Equity C) Leverage D) Capital structure ANSWER C
Date: September 19th, 2020
Which of the following statements about inventory control is TRUE? A) Too little inventory may lead to opportunity costs in the form of missed sales. B) Too much inventory may reduce profitability due to increased financing and storage costs. C) Seasonality in sales may require a firm to hold different levels of inventory throughout the […]
Date: September 19th, 2020
PrintQuik Inc. has a cost of equity of 14% and a cost of debt of 6%. If the firm is financed with 70% equity and 30% debt, and they operate under the conditions of a perfect capital market, what is the firm’s average cost of capital? A) 9.80% B) 10.50% C) 11.60% D) 10.00% […]
Date: September 19th, 2020
With ________ bonds a firm can choose to pay back the investor at a pre-specified date prior to the maturity date, usually at a pre-specified price above the face value, representing a premium to the bondholder A) callable B) convertible C) variable rate D) premium ANSWER A
Date: September 19th, 2020
The three basic types of leverage are ________. A) operating, production, and financial B) operating, production, and total C) production, financial, and total D) operating, financial, and total ANSWER D
Date: September 19th, 2020
