In the traditional approach to capital structure, as the amount of debt increases in a firm’s capital structure, ________. A) the cost of equity rises faster than the cost of debt B) the cost of debt rises faster than the cost of equity C) debt becomes less risky D) equity cost is unaffected […]
Date: September 19th, 2020
Products, but not services, need to be available to customers at the time customers need them. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Products AND SERVICES need to be available to customers at the time customers need them.
Date: September 19th, 2020
Underwriter generally places non-solicitation advertisements in the Wall Street Journal and/or other important newspapers notifying the public of the availability of an issue. These are called _____. a. tombstone ads b. headstone ads c. notifications of availability d. bond issue schedules ANSWER A
Date: September 19th, 2020
Cash disbursements or ________ are closely tied to the sales forecast as the sales forecasts are typically used for scheduling production. A) expenditures B) receipts C) revenues D) sales ANSWER Answer: A
Date: September 19th, 2020
A firm has a cash conversion cycle of 60 days. Annual outlays are $12 million and the cost of financing is 12 percent. If the firm reduces its average age of inventory by 10 days, the annual savings is ________. (Assume a 365-day year.) A) $10,400 B) $14,000 C) $28,800 D) $39,452 ANSWER […]
Date: September 19th, 2020
Northwest Packing Inc. estimates the following expenditures: total shipping costs of $1,100; wages paid to workers of $9,600; overhead costs of $4,300; raw materials of $5,000; and, dividends and interest paid of $2,200. What is the total production cost from all of these costs? A) $22,200 B) $21,100 C) $20,100 D) $20,000 ANSWER […]
Date: September 19th, 2020
In accounting, the recording of the cost of goods sold occurs at the time of the sale, but the cash flow may take place over an extended time period. Indicate whether the statement is true or false. ANSWER Answer: TRUE
Date: September 19th, 2020
When implementing the cash management strategies, a firm should avoid damaging a firm’s credit rating by overstretching accounts payable. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Once all the expenditures and receipts are determined, a financial manager can determine the probability of cash excess or cash shortfall in upcoming periods. Indicate whether the statement is true or false. ANSWER Answer: TRUE
Date: September 19th, 2020
Southwest Distribution Inc. estimates the following expenditures: interest paid of $17,500; wages paid to workers of $74,600; overhead costs of $12,300; raw materials of $55,000; shipping costs of $7,100 and dividends paid to common stockholders of $15,000. What are the total production costs? A) $141,900 B) $149,000 C) $166,500 D) $181,500 ANSWER Answer: […]
Date: September 19th, 2020
