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
The aggressive funding strategy is a strategy by which a firm finances all projected funds requirements with long-term funds and uses short-term financing only for emergencies or unexpected outflows. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
For a firm, bank loans can be a source of cash and interest payments to the bank can be a use of cash. Indicate whether the statement is true or false. ANSWER Answer: TRUE
Date: September 19th, 2020
________ consists of items such as the current interest rates, housing starts, gross national product (GNP), disposable income estimates, or other economic indicators. A) Accounting data B) Internal data C) External data D) Financial data ANSWER Answer: C Explanation: C) The amount of sales a company predicts is a function of external data, […]
Date: September 19th, 2020
A SOURCE of cash is utility payments. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: A USE of cash is utility payments.
Date: September 19th, 2020
