An understanding of how the company’s cost of capital is determined is one of the fundamental concepts that a nonfinancial manager should understand in order to: A) better assess the current environment in which the firm operates. B) better assess future financing requirements. C) better understand the role of capital markets in raising long-term funds. […]
________ is measured by the proportional amount of debt in the firm’s capital structure. A) Relative risk B) Business risk C) Operating risk D) Financial risk ANSWER D
The statement of cash flow explains the changes that took place in the firm’s cash balance over the period of interest. Indicate whether the statement is true or false ANSWER TRUE
Private placements usually have several advantages associated with them, but also tend to suffer from specific disadvantages. Which of the following is a disadvantage of a private placement when compared to other methods of selling new securities? A) avoidance of registration with the SEC B) higher interest costs C) reduced flotation costs D) strictly standardized […]
Based on the information in Table 4-1, the fixed asset turnover ratio is A) 2.17. B) 4.39. C) 4.80. D) 1.69. ANSWER D
On -The-Level Manufacturing buys materials on credit at the start of the month and pays in 60 days. They also sell on credit, bill customers at the beginning of the month, and receive payment 30 days later. Using Table 6.2, what is the net cash flow from purchases and sales for the month of March? […]
Which of the following is covered under the building and personal property coverage form? A) the insured’s stock and inventory when located inside the insured building B) vehicles owned by the insured C) aircraft and watercraft owned by the insured D) a manufacturing building owned by a key customer or key supplier of the insured. […]
All of the following business organizations provide limited liability to their owners EXCEPT A) limited liability company. B) general partnership. C) S-type corporation. D) corporation. ANSWER B
________ variability in revenues and a/an ________ operating margin mean higher business risk. A) Greater; increasing B) Lesser; declining C) Greater; declining D) None of the above. ANSWER C
Which of the following items is (are) contained in the common policy conditions page of the commercial package policy? I. A description of the property that is insured. II. A provision describing the insurer’s right to audit the insured’s books and records A) I only B) II only C) both I and II D) neither […]
