In credit terms, EOM (End-of-Month) indicates that the accounts payable must be paid by the end of the month in which the merchandise has been purchased. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Notes payable are either spontaneous secured or spontaneous unsecured financing and result from the normal operations of a firm. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
ROE is an important benchmark because it indicates the overall profits of a firm for a particular period relative to the shareholders’ investment in the firm. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The ________ method of capital budgeting finds the present value of cash inflows and subtracts the initial cash outflow. A) payback B) net present value C) internal rate of return D) modified internal rate of return ANSWER B
Date: September 19th, 2020
What is the logic behind using just one cost of debt financing rather than estimating the cost of financing with each specific issue of long and short-term debt? What will be an ideal response? ANSWER The logic behind using just one rate–a long-term yield–for both short-term and long-term debt is that while short-term […]
Date: September 19th, 2020
According to ________, investors’ demands for dividends fluctuate over time. A) the catering theory B) Modigliani and Miller theory C) the residual theory of dividends D) CAPM theory ANSWER A
Date: September 19th, 2020
Use the information in Table 4.1 to determine the 2013 current ratio for Bacon Signs. A) $3,908/$2,943 = 1.33 B) $3,527/$2,250 = 1.57 C) $3,170/$2,943 = 1.08 D) $713/$2,943 = 0.24 ANSWER A Explanation: A) CR = CA / CL
Date: September 19th, 2020
A firm’s balance sheet provides a representation of the current market value of the company. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Based strictly on the payback method, which project is preferred? A) Project A because the payback for A of 1.92 years is less than the payback for B of 2.23 years. B) Project A because the payback for A of 2.23 years is greater than the payback for B of 1.92 years. C) Project B […]
Date: September 19th, 2020
When calculating the WACC it is common to include the estimated cost of accounts payable if a firm does not take the discount for early payment. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
