As with a lot of planning, the financial forecast begins with ________ estimates and ________ schedules. A) sales; production B) sales; profit C) dividends; production D) profits; dividend ANSWER Answer: A
Date: September 19th, 2020
Short-term decisions are viewed as decisions that have short-term impacts and can be changed or modified at ________. A) relatively low costs B) relatively high costs C) relatively high time requirements D) relatively low costs with high time requirements ANSWER Answer: A
Date: September 19th, 2020
As financial leverage increases, the cost of debt initially remains constant and then rises, while the cost of equity always rises. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Southwest Outdoor Store will have cash receipts of $47,000 in November and cash disbursements of $41,000 for this month. If its beginning cash is $7,000 and its desired reserve is $4,000, what will its excess be for December? A) There is no excess but a shortfall. B) $6,000 C) $9,000 D) $13,000 ANSWER […]
Date: September 19th, 2020
With an unlimited amount of funds, a firm could accept all positive NPV projects. However, with limited budgets, managers are forced to accept some positive NPV projects while rejecting others. What overall financial rule should managers follow when choosing the portfolio of projects to accept? Why? What will be an ideal response? ANSWER […]
Date: September 19th, 2020
Using beta as a risk measurement device has not caught on in the real world because finding the value is nearly impossible for most investors. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Most online investment information sources provide estimates of beta for publicly traded securities; e.g. finance.yahoo.com.
Date: September 19th, 2020
One of the functions of a finance manager is ________. A) to forecast for the coming period B) to forecast for the present period C) to forecast for the past period D) to forecast for the present and future periods ANSWER Answer: A
Date: September 19th, 2020
The best rule for choosing projects when a firm has a limited amount of funds is to accept the group of projects with the greatest combined ________. A) number of projects B) IRR C) NPV D) time to completion ANSWER Answer: C
Date: September 19th, 2020
The cost of equity is greater than the cost of debt and increases with increasing financial leverage, but generally less rapidly than the cost of debt. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
In general, a subjective assessment of betas and projects is preferred to the pure play approach. Indicate whether the statement is true or false.c ANSWER Answer: FALSE Explanation: In general, a pure play approach to assigning betas to projects is preferred to a subjective assessment.
Date: September 19th, 2020
