Which of the following is NOT a potential cost of granting trade credit? A) Delayed receipt of cash from sales B) Lost cash due to customers taking an offered discount for earlier payment C) Lost receipts due to inability of customers to pay agreed to credit terms D) Increased sales ANSWER D
Date: September 19th, 2020
Which of the following is NOT a reason why banks are more willing to lend to some firms than to others? A) Banks prefer to lend to firms with more stable cash flows. B) Banks prefer to lend to firms with more physical as opposed to intellectual assets. C) Banks prefer to lend to firms […]
Date: September 19th, 2020
Any project with a profitability index below 1.0 should be accepted as this implies that the benefits exceed the costs. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A firm’s capital structure combines all forms of long-term financing on which the firm relies EXCEPT: A) long-term debt. B) common equity. C) inventory. D) preferred shares. ANSWER C
Date: September 19th, 2020
The profitability index measure is useful for ranking a series of projects based on the notion of getting “bang for your buck,” or receiving as much value added as possible in excess of each dollar of investment. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following is NOT an example of a type of inventory management activity? A) JIT or just-in-time inventory control system B) RFI or radio frequency identification systems. C) EOQ or economic order quantity formulas. D) All of the above are forms of inventory control. ANSWER D
Date: September 19th, 2020
When a country imports more than it exports, it will: A) be known as a net importing country and this portion of the GDP will have positive value. B) be known as a net importing country and this portion of its GDP will have a negative value. C) be known as a net exporting country […]
Date: September 19th, 2020
A firm’s operating breakeven point is the level of sales necessary to cover all fixed operating costs. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Under a line of credit agreement, a bank may retain the right to revoke the line if any major changes occur in the firm’s financial condition or operations. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Capital structure is important, but it CANNOT impact the overall value of a firm. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
