In the EOQ model, if carrying costs increase while all other costs remain unchanged, the number of orders placed would be expected to increase. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Bankruptcy risk plays a role in the propagation of recessions by: a. causing a backlog in the caseloads of bankruptcy courts. b. causing firms to increase capital expenditures as the economy begins to slow. c. forcing firms to pay down debt. d. straining the liquidity positions of both individuals and firms, both of which try […]
Date: September 19th, 2020
When the Federal Reserve Board’s open market committee buys T-bills, it is pursuing a. contractionary monetary policy. b. expansionary monetary policy. c. fiscal discipline. d. a policy of balancing the federal budget. ANSWER B
Date: September 19th, 2020
A firm’s financing requirements can be separated into ________. A) current liabilities and short-term funds B) current assets and fixed assets C) current liabilities and long-term debt D) seasonal and permanent ANSWER D
Date: September 19th, 2020
If the bidder in a hostile takeover faces target management resistance, as an alternative to either bidding higher or terminating the tender offer process, bidders sometimes offer target management compensation to end its resistance. This compensation is called: a. a golden parachute. b. a silver bullet. c. a gold watch. d. removal remuneration. […]
Date: September 19th, 2020
The literature emphasizes three motives for a buyout, including all of the following EXCEPT: a. to increase access to capital markets. b. to increase managerial incentives. c. to avert a takeover. d. to realize tax-reduction benefits. ANSWER A
Date: September 19th, 2020
Because managing inventory is just like managing any other investment, decisions about the level of inventory should be guided by the effect of inventory levels on sales. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The basic strategies for determining the appropriate financing mix are ________. A) seasonal and permanent funding B) short-term and long-term financing C) aggressive and conservative funding D) current and non-current liabilities ANSWER C
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
