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
At the operating breakeven point, the sales revenue is equal to the sum of the fixed and variable operating costs. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Capital budgeting decisions are more complex when: A) projects are mutually exclusive. B) comparison projects are not of equal length. C) capital is rationed. D) All of the above are true. ANSWER D
Date: September 19th, 2020
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
