The reorder point is an inventory management system that compares production needs to available inventory balances and determines when orders should be placed for various items on a firm’s bill of materials. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
In a takeover bid, target management may offer to repurchase the bidder’s shares at a large premium if the bidder promises to cease and desist. The premium payoff is called (i), and the agreement to cease and desist is called a (ii). (i) (ii) a. subornation stand down agreement b. subornation standstill agreement c. greenmail […]
Date: September 19th, 2020
TRUE or FALSE. Agency costs of managerial discretion are one of the few costs that are not exacerbated when a firm is under financial distress. a. TRUE b. FALSE ANSWER B
Date: September 19th, 2020
If a firm uses an aggressive financing strategy, ________. A) it increases return and increases risk B) it increases return and decreases risk C) it decreases return and increases risk D) it decreases return and decreases risk ANSWER A
Date: September 19th, 2020
One major risk a firm assumes in an aggressive financing strategy is ________. A) the possibility that collections will be slower than expected B) the possibility that long-term funds may not be available when needed C) the possibility that short-term funds may not be available when needed D) the possibility that it will run out […]
Date: September 19th, 2020
A is an agreement among the few dominant firms in an industry to coordinate production and, as alleged, to cut prices temporarily in order to drive out or acquire smaller competitors, after which they could raise prices substantially. a. syndicate b. trust c. non-compete clause d. cut-throat accord ANSWER B
Date: September 19th, 2020
The Financial Accounting Standards Board (FASB) has recently voted to eliminate (i) accounting for mergers, and henceforth will allow only the (ii). (i) (ii) a. purchase method pool of interest b. amalgamation consolidation c. pooling of interest purchase method d. consolidation amalgamation ANSWER C
Date: September 19th, 2020
The basic strategies that should be employed by a business firm in managing cash includes ________. A) paying accounts payable as early as possible B) turning over inventory as quickly as possible, avoiding stockouts C) operating in a fashion that requires maximum cash D) extending the credit period allowed to customers ANSWER B
Date: September 19th, 2020
For minimizing the cash conversion cycle, a firm should ________. A) grant longer credit terms to customers to maintain healthy business relations B) pay off accounts payables as fast as possible to gain credibility C) turn over inventory as quickly as possible without stockouts D) increase mail managing, processing, and clearing time when collecting from […]
Date: September 19th, 2020
TRUE or FALSE: A merger announcement induces a substantial positive abnormal return on the acquiring firm’s stock (approximately 20%, on average), while the target firm’s stockholders are either unaffected or sustain small losses, on average. a. TRUE b. FALSE ANSWER B
Date: September 19th, 2020
