An increment above the prime rate on a floating-rate loan will be higher than on a fixed-rate loan of equivalent risk because the lender bears higher risk with a floating-rate loan. Indicate whether the statement is true or false ANSWER FALSE
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
There are limitations to using the net present value method. Note that a very small project might have a net present value, but in dollar terms, it might add only a small amount of value compared with a larger project with a lower net present value. Indicate whether the statement is true or false […]
Date: September 19th, 2020
Which of the following in NOT a potential benefit of granting trade credit? A) Enhances competitiveness for the firm granting credit. B) A delay in receiving payment from customers. C) May assist in generating additional sales. D) May allow quicker movement of inventory. ANSWER B
Date: September 19th, 2020
Different sectors or industries grow or shrink at various stages in the business cycle. Which statement is TRUE? A) Utilities tend to do relatively better in the early stages of an expansion. B) Basic materials tend to do well in the early stages of a recession. C) Healthcare tends to do well at the peak […]
Date: September 19th, 2020
In finding the operating breakeven point, it is important to divide the cost of goods sold and operating expenses into fixed and variable operating costs. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Under a line of credit agreement, a bank may require an annual cleanup, which means that the borrower must pay off all its outstanding debts to all its operational creditors for a certain number of days during the year. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A single-payment note is a secured fund which can be obtained from a commercial bank when a borrower needs additional funds for a short period. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The Fed’s primary goals are: A) maintaining stable prices. B) maintaining low or steady inflation. C) maximizing employment. D) All of the above. ANSWER D
Date: September 19th, 2020
Which of the following is NOT a cost associated with holding inventory? A) Money tied up in holding inventory is not available for other purposes. B) Inventory generates storage and insurance costs. C) The ability to meet a surge in demand for the goods carried in inventory. D) Items in inventory may become obsolete and […]
Date: September 19th, 2020
