A firm’s credit standards are the minimum requirements for extending credit to a customer. Indicate whether the statement is true or false ANSWER TRUE
The gives the bond issuer an option to redeem a specified fraction of the bond issue within a specified period at a predetermined price, but only by using funds from a subsequent equity offering. a. subsequent events provision b. clawback provision c. contingency provision d. conversion provision ANSWER B
With a make whole call provision: a. the firm to pay a call price that is sufficient to provide bondholders an ex post return equal to the return they would have received on a noncallable Treasury bond with the same original maturity as the called bond. b. the firm must retire either the entire (or […]
_ has become an important means by which huge infrastructure projects are privately financed. a. Private placement financing b. Infrastructure funding c. Project finance d. Country finance ANSWER C
By increasing collection expenditures, a firm can decrease bad debt losses up to a point, beyond which bad debts cannot be economically reduced. Indicate whether the statement is true or false ANSWER TRUE
A swap contract is in essence a portfolio, or series, of a. forward contracts. b. futures contracts. c. repurchase agreements. d. resettlement agreements. ANSWER A
In complete voluntary liquidations, the sum of the firm’s parts is worth more than the whole, for all of the following reasons EXCEPT: a. the assets (or divisions) may be worth more in the hands of more competent managers. b. liquidated assets always sell at a premium to their fair value. c. the special tax […]
Jia’s Apple Farm uses 35 baskets each day to pack apples for shipping. It takes 5 days to receive a shipment of baskets after an order is placed and she would like a safety stock of 3 days in inventory. At what level of inventory should Jia’s place an order for baskets? ANSWER […]
Inventory items that belong in the C category include ________. (See Table 14.4) A) Items 4 and 6 B) Items 6 and 8 C) Items 1, 7, and 9 D) Items 1 and 3 ANSWER C
In the EOQ model, ________ costs are the fixed clerical cost of writing a purchase order, processing the paper work, and verifying the invoice. A) basic B) order C) carrying D) insurance ANSWER B