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
Earnings before interest and taxes are positive above the operating breakeven point, and a loss occurs below it. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
According to a recent study, CFOs estimated they were able to add about THIRTY percent of the overall value of the firm through financial management. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which of the following trade credit terms for goods and services purchased would be least desireable to the purchasing firm? A) 2/10 net 30 B) 1/10 net 30 C) 3/15 net 30 D) Unless we know the firm’s cost of borrowing we cannot determine which set of terms is least preferred. ANSWER B
Date: September 19th, 2020
Capital budgeting is the mix of debt and common equity (as well as preferred equity) of a firm. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
