A compensating balance is a balance in checking account that is equal to a certain percentage of the borrower’s short-term unsecured loan. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Due to the difficulty of allocating costs to products in a multiproduct firm, the breakeven model may fail to determine breakeven points for each product line. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The use of a dollar breakeven point is important when a firm has more than one product, especially when each product is selling at a different price. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following actions could INCREASE a firm’s working capital gap? A) reduce the age of inventory B) increase the age of accounts payable C) increase the age of accounts receivable D) All actions listed would increase a firm’s working capital gap. ANSWER C
Date: September 19th, 2020
Capital market conditions can affect the timing of a new equity issue because: A) Issuing new equity may be harder when stock prices are rising. B) Issuing new equity may be easier when stock prices are rising. C) Issuing new equity may be harder when stock prices are falling. D) B and C […]
Date: September 19th, 2020
For sales levels below the operating breakeven point, sales revenue exceeds total operating costs, and earnings before interest and taxes is greater than zero. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
There are no adequate methods for comparing projects of unequal lives. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
According to data assembled for U.S. firms, the average level of debt as a percentage of capital is approximately equal across industries. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Ultimately, when faced with capital rationing, firms should choose the combination of capital projects that maximizes the NPV subject to the capital constraints. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following is NOT a question related to the analysis of the overall economy? A) What is the current business cycle stage? B) How profitable is the industry cycle? C) How important are interest rates in the financial position of the firm within the industry? D) How easy is it to obtain debt […]
Date: September 19th, 2020
