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 […]
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
The Steel Works, Inc. is required to carry a minimum of 40 days’ raw steel, which is 250 tons. It takes 15 days between order and delivery. At what level of steel would Steel Works reorder? A) 3,750 tons B) 600 tons C) 667 tons D) 344 tons ANSWER D
The two constructs that form a firm’s organizational architecture are: a. business architecture and economic architecture. b. economic architecture and financial architecture. c. business architecture and financial architecture. d. organizational hierarchy and financial structure. ANSWER C
The macroeconomic component of a firm’s business architecture includes all of the following elements EXCEPT: a. economic growth projections, inflation, and taxes. b. industry characteristics. c. legal environment. d. macroeconomic risk factors. ANSWER B
TRUE or FALSE: According to empirical studies, the combination of secured private debt and numerous public debt issues (in a distressed firm’s capital structure) impedes out-of-court debt restructuring and increases the probability of a Chapter 11 filing. a. TRUE b. FALSE ANSWER A
To preserve the value of a distressed firm, it is generally important for the firm to continue operating throughout Chapter 11 proceedings. Generally, the firm’s current management is allowed to run the firm during the proceedings under a restrictive arrangement called a. the value-preservation dictum. b. debtor-in-possession. c. managerial discretion. d. trustee assignment. […]
In the EOQ model, if the size of order increases, the ________. A) carrying cost will increase B) order cost will remain unchanged C) order cost will increase D) storage cost will decrease ANSWER A
The ________ is an inventory management technique that compares production needs to available inventory balances and determines when orders should be placed for various material inputs. A) ABC system B) EOQ model C) MRP system D) JIT system ANSWER C
According to the Absolute Priority Rule (APR), the correct descending order of claim priority is: a. administrative claims; statutory priority claims; secured creditors’ claims; unsecured creditors’ claims; equity claims. b. equity claims; administrative claims; statutory priority claims; secured creditors’ claims; unsecured creditors’ claims. c. statutory priority claims; administrative claims; secured creditors’ claims; unsecured creditors’ claims; […]