The ________ schedule will usually be based on the ________ forecast. A) sales; production B) production; sales C) forecast; scheduled D) production; cash ANSWER Answer: B
Date: September 19th, 2020
Beginning with a zero-leverage company, as debt is substituted for equity in the capital structure ________. A) the overall cost of capital first rises, reaches a maximum, and then declines B) the overall cost of capital declines C) the overall cost of capital first declines, reaches a minimum, and then rises D) the overall cost […]
Date: September 19th, 2020
The risk of the conservative funding requirements is low because of its high level of net working capital, and the fact that the strategy does not require a firm to use any of its limited short-term borrowing capacity. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Essentially, a convertible bond is a portfolio of: a. a bond and an automobile whose top can be removed. b. an otherwise equivalent nonconvertible bond and shares of the issuing firm’s stock. c. an otherwise equivalent nonconvertible bond and a call option on the firm’s stock. d. an otherwise equivalent nonconvertible bond and a put […]
Date: September 19th, 2020
In theory, a firm’s optimal capital structure is that which minimized the firm’s overall cost of capital resulting in a maximization of the market value of a firm. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Bond contracts generally include restrictive covenants, designed to protect the interests of the bondholders. Typical covenants restrict all of the following EXCEPT: a. the borrowing firm’s investment activities. b. the borrowing firm’s ability to issue additional debt. c. the borrowing firm’s dividend policy. d. the firm’s hiring of management personnel. ANSWER D
Date: September 19th, 2020
The aggressive funding strategy is risky due to its minimum level of net working capital, high dependency on short-term sources of funds, and the changing short-term interest. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The amount of sales a company predicts is a function of two types of data. Which of the types below is one of these two types? A) Accounting data B) Internal data C) Rationing data D) Legal data ANSWER Answer: B Explanation: B) The amount of sales a company predicts is a function […]
Date: September 19th, 2020
Based on the sales forecast, the finance manager estimates the receipt of cash based on cash and ________. A) credit sales B) inventory sales C) accounts receivables D) net income ANSWER Answer: A
Date: September 19th, 2020
________ consists of items such as number of sales personnel in the field and average sales per representative, competitors and alternative products, and production capabilities and schedules as well as other factors known mainly to the company. A) External data B) Product data C) Employee data D) Internal data ANSWER Answer: D Explanation: […]
Date: September 19th, 2020
