The contribution margin is defined as the percent of each sales dollar that remains after satisfying fixed operating costs. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
________ 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
A leveraged buyout (LBO) is when we tend to find firms at their lowest debt levels. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A fixed-rate loan is a loan whose rate of interest is established at a fixed increment above the prime rate and is allowed to vary above the prime rate only when the prime rate varies until maturity. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The overall goal in sizing up each external and internal factor is to increase the value of the firm. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Although more expensive than a line of credit, a revolving credit agreement can be less risky from the borrower’s viewpoint. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The brew master at Appalachian Ale has asked you to help choose between two alternatives for a plant expansion. The first choice is a new brew system that costs $180,000 with annual maintenance costs of $17,000, an expected life of 15 years and a required rate of return of 12%. the alternative brew system costs […]
Date: September 19th, 2020
The shape of the yield curve is important for which of the following reasons? A) It provides an indication of the anticipated change in interest rates. B) It provides an indication of the borrowing costs for corporation. C) It provides clues about the economy’s current position in the business cycle. D) All of the above. […]
Date: September 19th, 2020
