________ are financial creditors for the firm whereas ________ are the firm owners. A) Bankers; bondholders B) Bondholders; stockholders C) Stockholders; bondholders D) Stockholders; bankers ANSWER B
Date: September 19th, 2020
Which of the following definitions of working capital gap (WCG) is accurate? A) WCG = age of inventory – age of receivables – age of payables B) WCG = Age of receivables – age of inventory – age of payables C) WCG = age of payables – age of inventory – age of receivables D) […]
Date: September 19th, 2020
Modigliani and Miller (M&M) Proposition II states: A) the cost of equity does not change when a firm takes on a greater proportion of debt. B) the cost of equity increases when a firm takes on a greater proportion of debt. C) the cost of debt increases when a firm takes on a greater proportion […]
Date: September 19th, 2020
Operating-change restrictions gives the bank a right to revoke the line of credit if any major changes occur in a firm’s financial condition or operations. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Capital market conditions affect the timing of a new equity issue. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The breakeven point in dollars can be computed by dividing the contribution margin into the variable operating costs. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which of the following actions could DECREASE a firm’s working capital gap? A) reduce the age of inventory B) reduce the age of accounts payable C) increase the age of accounts receivable D) All actions listed would decrease a firm’s working capital gap. ANSWER A
Date: September 19th, 2020
What is the percentage cost of foregoing the payable discounts when the terms are 1/15 net 45 (rounded to the nearest whole percentage point)? A) 8% B) 10% C) 12% D) 14% ANSWER C
Date: September 19th, 2020
Describe the four stages of the business cycle. What are the characteristics of each stage and how would a financial manager adjust their strategic and tactical planning for changes in the business cycle? What will be an ideal response? ANSWER Peaks in the business cycle tend to occur when the capacity-to-output gap is […]
Date: September 19th, 2020
If one borrows $1,000 at 8 percent interest on a discount basis, the effective rate of interest is 7.2 percent. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
