Income Statement CFM Majestic Inc Years 1 & 2 ($000,000s) Year 1 Year 2 Sales 381.9 416.3 COGS 244.9 278.9 SG&A 59.7 63.8 Depreciation 13.8 15.4 R & D 5.3 4.3 EBIT 58.2 53.9 Interest Expense 7.3 7.9 Earnings before Income Tax 50.9 46.0 Income Taxes 17.3 14.8 Net Income 33.6 31.2 Referring to the […]
Date: September 19th, 2020
Futures contracts may help firms hedge against exchange rate risk by A) enabling the hedger to offset foreign currency losses by profiting from the sale of the futures contract. B) giving the owner of the contract the right to swap one currency for another at a later date. C) giving the holder of the contract […]
Date: September 19th, 2020
What is the percentage holding cost per period for a credit with the terms of 2/30 net 60? A) .0101 B) .2787 C) .0667 D) .0204 E) .0352 ANSWER D
Date: September 19th, 2020
What is a usual default rate when looking at bad debt losses? A) 2% B) 3% C) 4% D) 5% E) 6% ANSWER A
Date: September 19th, 2020
A company is offering a discount with terms 3/15 net 40. What is the discount rate associated with this offer? A) 3% B) 15% C) 40% D) 20% E) 5% ANSWER A
Date: September 19th, 2020
Expropriation is another name for: A) Arbitrage B) Hedging C) Parity D) Nationalization ANSWER D
Date: September 19th, 2020
All of the following are part of the five “Cs” of credit analysis EXCEPT A) currency. B) capital. C) collateral. D) conditions. E) capacity. ANSWER A
Date: September 19th, 2020
The best source of information about a customer’s credit is/are A) the firm’s experience with the customer. B) Dun and Bradstreet. C) information from the customer’s bank. D) data from financial markets. E) credit references supplied by the customer. ANSWER A
Date: September 19th, 2020
An accounts receivable aging schedule is used to A) decide whether to extend credit. B) determine whether legal action should be taken against a customer with a past due account. C) provide information about whether the firm’s prices are too low. D) monitor accounts receivable. E) make decisions regarding the length of time a firm […]
Date: September 19th, 2020
Insisting the contracts be denominated in the U.S. dollar can help avoid ________. A) Exchange rate risk B) Arbitrage C) Political risk D) PPP ANSWER A
Date: September 19th, 2020
