With subordinated debentures, payment of interest by a firm is required only when earnings are available. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A firm can retain more of its earnings if it can convince its stockholders that it will earn at least their required return on the reinvested funds. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
In computing the cost of retained earnings, the net proceeds represents the amount of money retained net of any underpricing and/or flotation costs. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Inventory for CEE in 2013 was ________. (See Table 3.1) A) $36,667 B) $32,448 C) $27,500 D) $ 9,167 ANSWER C
Date: September 19th, 2020
Notes payable for CEE in 2013 was ________. (See Table 3.1) A) $113,466 B) $ 52,372 C) $ 41,372 D) $ 10,609 ANSWER D
Date: September 19th, 2020
An opportunity cost is a cash flow that could be realized from the best alternative use of an owned asset. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Cash outlays that had been previously made and have no effect on the cash flows relevant to a current decision are called ________. A) incremental historical costs B) incremental past expenses C) opportunity costs foregone D) sunk costs ANSWER D
Date: September 19th, 2020
________ ratio indicates that a firm will be able to meet interest obligations due on outstanding debt. A) Debt-to-equity B) Interest turnover C) Total assets turnover D) Times interest earned ANSWER D
Date: September 19th, 2020
Since the issuer of zero (or low) coupon bonds can annually deduct the current year’s interest accrual without having to actually pay the interest until the bond matures (or is called), its cash flow each year is increased by the amount of the tax shield provided by the interest deduction. Indicate whether the statement is […]
Date: September 19th, 2020
A sunk cost is a cash outlay that has already been made and cannot be recovered. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
