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
Gross domestic product product (GDP) is a measure of: A) the total amount of goods and services sold over a particular period of time. B) the total amount of goods and services produced over a particular period of time. C) the projected amount of goods and services to be produced over a particular period of […]
Date: September 19th, 2020
Breakeven analysis is used by a firm to determine the level of operations necessary to cover all fixed operating costs and to evaluate the profitability associated with various levels of production. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Increases in assets and decreases in liabilities and equities represent SOURCES of cash. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A firm’s risk level will fluctuate as its ________ changes. A) financial leverage B) debt-to-equity C) degree of financial leverage D) All of the above. ANSWER D
Date: September 19th, 2020
While operating leverage results only in a magnification of returns, financial leverage results only in a magnification of risk. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The effective interest rate on a bank loan depends on whether interest is paid when the loan matures or in advance. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following statements are NOT true? A) Peaks in the business cycle tend to occur when the capacity-to-output gap is the largest. B) Peaks in the business cycle tend to occur when the capacity-to-output gap is the smallest. C) Troughs occur when the capacity-to-output gap is the largest. D) None of the above. […]
Date: September 19th, 2020
A firm’s capital structure combines all forms of financing on which the firm relies including: A) preferred shares. B) common equity. C) long-term debt. D) All of the above. ANSWER D
Date: September 19th, 2020
