Which of the following is not considered a cost for administering the accounts receivable? A) analyzing credit B) increased holdings C) sending out bills D) collecting past due accounts ANSWER B
Date: September 19th, 2020
XY Corp has a plant in a small country with a friendly, though unstable government. A new government takes over before XY Corp is able to move any assets out of the country. The new government chooses to not recognize XY’s ownership and takes control of the company’s assets. This is an example of A) […]
Date: September 19th, 2020
Political risk may be hedged with A) higher operating leverage. B) lower breakeven points. C) forward contracts. D) futures contracts. E) alliances developed with foreign governments. ANSWER E
Date: September 19th, 2020
The annualized interest rate that is realized when not taking advantage of a possible cash discount is known as: A) High cost financing B) Low cost financing C) The effective interest rate D) The flat rate ANSWER C
Date: September 19th, 2020
Tootsie Roll Industries Inc. Income Statement As of December 31, Year 6 ($000s) Year 6 Net sales 194,299 COGS 103,205 SG&A 54,329 EBIT 36,765 Interest expense 612 Other income (expenses), net 966 Income before income taxes 37,119 Income taxes 14,563 Net Income 22,556 Total Cash dividends 12,316 Shares Outstanding 9,645 Average price per share (4th […]
Date: September 19th, 2020
You have equal amounts of money invested in a risk-free dollar-denominated investment and borrowed at the rate paid on the British pound. If you can earn a return during this, you have shown: A) Interest rate arbitrage. B) Interest rate parity C) Purchasing power arbitrage D) Purchasing power parity ANSWER A
Date: September 19th, 2020
Which of the following is not a possible political risk when practicing business internationally? A) Loss of using own specialized labor B) Fewer opportunities for growth C) Limited ability to convert currency D) Additional taxes ANSWER B
Date: September 19th, 2020
It is more difficult to deal with political risk than exchange rate risk. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A company has the possibility to pay off a line of credit early for a 2% discount rate if paid off in 25 days. There are 24.333 discount periods for the year for this money if the discount is not taken. What are the terms for this cash discount? A) 2/25 net 50 B) 2/25 […]
Date: September 19th, 2020
Tariffs imposed by a foreign government are an example of A) Exchange rate risk B) Foreign risk C) Policy risk D) Political risk ANSWER D
Date: September 19th, 2020
