The total cost of a firm’s inventory is found by summing the ________. A) order cost and the marginal cost of a firm’s inventory B) order cost and the carrying cost of a firm’s inventory C) order cost and the actual cost of a firm’s inventory D) carrying cost and the marginal cost of a […]
Date: September 19th, 2020
According to signaling theory, Chapter 11 is a useful mechanism for screening inefficient firms out of debt renegotiation. Inefficient firms voluntarily choose Chapter 11 because: a. the firm can be liquidated more quickly. b. negotiations therein generally result in some value retained by shareholders. c. creditors are protected from violations of the absolute priority rule […]
Date: September 19th, 2020
Which of the following is an example of carrying cost? A) insurance of goods in transit B) transportation cost C) insurance cost D) cost of inventory ANSWER C
Date: September 19th, 2020
Investors who specialize in the debt or equity of distressed firms are called: a. speculators. b. arbitrageurs. c. bottom dwellers. d. vulture investors. ANSWER D
Date: September 19th, 2020
TRUE or FALSE: For distressed firms with both bank and public debt outstanding, banks never make concessions unless public debtholders also restructure their claims. a. TRUE b. FALSE ANSWER A
Date: September 19th, 2020
The ________ is a technique that divides inventory into three groups, according to dollar investment. A) JIT system B) ABC system C) EOQ model D) LIFO model ANSWER B
Date: September 19th, 2020
To address distress, any of the following changes in the focal firm’s board structure are consistent with theory EXCEPT: a. replacing insiders with outsiders. b. limiting the ability of the board to veto the CEO’s proposals. c. requiring directors to hold equity shares. d. limiting the tenure of directors e. ending the staggering of board […]
Date: September 19th, 2020
In the ABC system of inventory management, the ________ method could be utilized to control C items. A) basic economic order quantity B) materials requirement planning C) two-bin D) just-in-time ANSWER C
Date: September 19th, 2020
Empirical evidence indicates that the majority of distressed public firms that do not remain public: a. file for Chapter 11 bankruptcy (reorganization). b. file for Chapter 7 bankruptcy (liquidation). c. are acquired. d. undergo a going-private transaction (i.e., a buyout). ANSWER C
Date: September 19th, 2020
A popular extension of materials requirement planning is manufacturing resource planning II, which integrates data from numerous areas such as finance, accounting, marketing, engineering, and manufacturing using a sophisticated computer system. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
