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The capital intensity ratio is the reciprocal of the Select one: A. Current ratio B. Quick ratio C. Return on assets ratio D. Fixed assets turnover ratio E. Total assets turnover ratio

Question 2

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Which of the following statements is most correct? Select one: A. Since accounts payable and accruals must eventually be paid, as these accounts increase, AFN also increases. B. Suppose a firm is operating its fixed assets below 100% capacity but is at 100% with respect to current assets. If sales grow, the firm can offset the needed increase in current assets with its idle fixed capacity. C. If a firm retains all of its earnings, then it will not need any additional funds to support sales growth. D. Additional funds needed are typically raised from some combination of notes payable, long-term bonds, and common stock. These accounts are "nonspontaneous" in that they require an explicit financing decision to increase them. E. Under identical assumptions the projected balance sheet method (first-pass) and AFN formula will usually produce different AFN amounts.

Question 3

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A 9-year, 5.5% bond is selling for $1091.89. The yield to maturity on this bond is Select one: A. more than 5.5% B. 4.25% C. 5.0% D. 5.5% E. 9.2%

Question 4

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Consider two bonds. One is a AA-rated, 5-year bond; the other is a BBB-rated 15-year bond. Concerning the risk of these two bonds: Select one: A. the first bond has more default risk. B. the first bond has less interest rate risk but more default risk. C. the second bond has more default risk but less interest rate risk. D. the first bond has both less default risk and less interest rate risk. E. the second bond will have a lower yield to maturity than the first bond.

Question 5

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"Spontaneous liabilities" Select one: A. are defined as "uses of funds" B. include notes payable and long-term debt C. increase only as the result of conscious efforts to increase debt D. increase as sales increase, without any special effort by management E. do not affect the firm's need for external financing.

Question 6

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Concerning the call provision on a corporate bond. . .
Select one: A. such a bond is riskier than an equivalent, non-callable bond. B. such a bond will have a lower yield to maturity than an equivalent, non-callable bond. C. such a bond will sell at a higher price than an equivalent, non-callable bond. D. investors will be unwilling to buy a callable bond. E. the bond will only be called if market interest rates rise.

Question 7

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The yield to maturity on a bond is Select one: A. equal to the coupon interest rate B. equal to "the market rate" on bonds of equivalent risk C. an internal rate of return D. the expected rate of return on the bond E. Answers b, c, and d are all correct.

Question 8

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The actual return on a bond will equal its expected return only if Select one: A. All promised interest and principal payments are actually received. B. Interest payments, as received, are reinvested at the expected rate of return C. Both a and b, above, occur. D. The actual return will always equal the expected return as long as the bond is not called and the issuer does not default. E. Interest payments are reinvested at a rate higher than the expected return.

Question 9

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A firm's current sales are $200,000; assets are now $50,000. The company is operating at 70% of capacity. If the company plans to increase sales by 50%, by how much will assets have to increase? Select one: A. Assets will not need to increase at all. B. By $100,000 C. By $2,500 D. By $85,700 E. By $10,725

Question 10

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Current sales are $3.5 million and management hopes to increase sales by 20%. Net income is $140,000 and dividends are $42,000. If sales increase as expected and balance sheet and income statement relationships do not change, by how much will the company's retained earnings increase? Select one: A. $117,600 B. $50,400 C. $168,000 D. $98,000 E. $126,000

Question 1

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The capital intensity ratio is the reciprocal of the Select one: A. Current ratio B. Quick ratio C. Return on assets ratio D. Fixed assets turnover ratio E. Total assets turnover ratio

Question 2

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Which of the following statements is most correct? Select one: A. Since accounts payable and accruals must eventually be paid, as these accounts increase, AFN also increases. B. Suppose a firm is operating its fixed assets below 100% capacity but is at 100% with respect to current assets. If sales grow, the firm can offset the needed increase in current assets with its idle fixed capacity. C. If a firm retains all of its earnings, then it will not need any additional funds to support sales growth. D. Additional funds needed are typically raised from some combination of notes payable, long-term bonds, and common stock. These accounts are "nonspontaneous" in that they require an explicit financing decision to increase them. E. Under identical assumptions the projected balance sheet method (first-pass) and AFN formula will usually produce different AFN amounts.

Question 3

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A 9-year, 5.5% bond is selling for $1091.89. The yield to maturity on this bond is Select one: A. more than 5.5% B. 4.25% C. 5.0% D. 5.5% E. 9.2%

Question 1

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The capital intensity ratio is the reciprocal of the Select one: A. Current ratio B. Quick ratio C. Return on assets ratio D. Fixed assets turnover ratio E. Total assets turnover ratio

Question 1

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The capital intensity ratio is the reciprocal of the Select one: A. Current ratio B. Quick ratio C. Return on assets ratio D. Fixed assets turnover ratio E. Total assets turnover ratio

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The capital intensity ratio is the reciprocal of the Select one: A. Current ratio B. Quick ratio C. Return on assets ratio D. Fixed assets turnover ratio E. Total assets turnover ratio The capital intensity ratio is the reciprocal of the Select one: A. Current ratio B. Quick ratio C. Return on assets ratio D. Fixed assets turnover ratio E. Total assets turnover ratio Select one: A. Current ratio B. Quick ratio C. Return on assets ratio D. Fixed assets turnover ratio E. Total assets turnover ratio A. Current ratio B. Quick ratio C. Return on assets ratio D. Fixed assets turnover ratio E. Total assets turnover ratio

Question 2

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Which of the following statements is most correct? Select one: A. Since accounts payable and accruals must eventually be paid, as these accounts increase, AFN also increases. B. Suppose a firm is operating its fixed assets below 100% capacity but is at 100% with respect to current assets. If sales grow, the firm can offset the needed increase in current assets with its idle fixed capacity. C. If a firm retains all of its earnings, then it will not need any additional funds to support sales growth. D. Additional funds needed are typically raised from some combination of notes payable, long-term bonds, and common stock. These accounts are "nonspontaneous" in that they require an explicit financing decision to increase them. E. Under identical assumptions the projected balance sheet method (first-pass) and AFN formula will usually produce different AFN amounts.

Question 2

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Which of the following statements is most correct? Select one: A. Since accounts payable and accruals must eventually be paid, as these accounts increase, AFN also increases. B. Suppose a firm is operating its fixed assets below 100% capacity but is at 100% with respect to current assets. If sales grow, the firm can offset the needed increase in current assets with its idle fixed capacity. C. If a firm retains all of its earnings, then it will not need any additional funds to support sales growth. D. Additional funds needed are typically raised from some combination of notes payable, long-term bonds, and common stock. These accounts are "nonspontaneous" in that they require an explicit financing decision to increase them. E. Under identical assumptions the projected balance sheet method (first-pass) and AFN formula will usually produce different AFN amounts.

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Which of the following statements is most correct? Select one: A. Since accounts payable and accruals must eventually be paid, as these accounts increase, AFN also increases. B. Suppose a firm is operating its fixed assets below 100% capacity but is at 100% with respect to current assets. If sales grow, the firm can offset the needed increase in current assets with its idle fixed capacity. C. If a firm retains all of its earnings, then it will not need any additional funds to support sales growth. D. Additional funds needed are typically raised from some combination of notes payable, long-term bonds, and common stock. These accounts are "nonspontaneous" in that they require an explicit financing decision to increase them. E. Under identical assumptions the projected balance sheet method (first-pass) and AFN formula will usually produce different AFN amounts. Which of the following statements is most correct? Select one: A. Since accounts payable and accruals must eventually be paid, as these accounts increase, AFN also increases. B. Suppose a firm is operating its fixed assets below 100% capacity but is at 100% with respect to current assets. If sales grow, the firm can offset the needed increase in current assets with its idle fixed capacity. C. If a firm retains all of its earnings, then it will not need any additional funds to support sales growth. D. Additional funds needed are typically raised from some combination of notes payable, long-term bonds, and common stock. These accounts are "nonspontaneous" in that they require an explicit financing decision to increase them. E. Under identical assumptions the projected balance sheet method (first-pass) and AFN formula will usually produce different AFN amounts. Select one: A. Since accounts payable and accruals must eventually be paid, as these accounts increase, AFN also increases. B. Suppose a firm is operating its fixed assets below 100% capacity but is at 100% with respect to current assets. If sales grow, the firm can offset the needed increase in current assets with its idle fixed capacity. C. If a firm retains all of its earnings, then it will not need any additional funds to support sales growth. D. Additional funds needed are typically raised from some combination of notes payable, long-term bonds, and common stock. These accounts are "nonspontaneous" in that they require an explicit financing decision to increase them. E. Under identical assumptions the projected balance sheet method (first-pass) and AFN formula will usually produce different AFN amounts. A. Since accounts payable and accruals must eventually be paid, as these accounts increase, AFN also increases. B. Suppose a firm is operating its fixed assets below 100% capacity but is at 100% with respect to current assets. If sales grow, the firm can offset the needed increase in current assets with its idle fixed capacity. C. If a firm retains all of its earnings, then it will not need any additional funds to support sales growth. D. Additional funds needed are typically raised from some combination of notes payable, long-term bonds, and common stock. These accounts are "nonspontaneous" in that they require an explicit financing decision to increase them. E. Under identical assumptions the projected balance sheet method (first-pass) and AFN formula will usually produce different AFN amounts.

Question 3

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A 9-year, 5.5% bond is selling for $1091.89. The yield to maturity on this bond is Select one: A. more than 5.5% B. 4.25% C. 5.0% D. 5.5% E. 9.2%

Question 3

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A 9-year, 5.5% bond is selling for $1091.89. The yield to maturity on this bond is Select one: A. more than 5.5% B. 4.25% C. 5.0% D. 5.5% E. 9.2%

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A 9-year, 5.5% bond is selling for $1091.89. The yield to maturity on this bond is Select one: A. more than 5.5% B. 4.25% C. 5.0% D. 5.5% E. 9.2% A 9-year, 5.5% bond is selling for $1091.89. The yield to maturity on this bond is Select one: A. more than 5.5% B. 4.25% C. 5.0% D. 5.5% E. 9.2% Select one: A. more than 5.5% B. 4.25% C. 5.0% D. 5.5% E. 9.2% A. more than 5.5% B. 4.25% C. 5.0% D. 5.5% E. 9.2%

Question 4

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Consider two bonds. One is a AA-rated, 5-year bond; the other is a BBB-rated 15-year bond. Concerning the risk of these two bonds: Select one: A. the first bond has more default risk. B. the first bond has less interest rate risk but more default risk. C. the second bond has more default risk but less interest rate risk. D. the first bond has both less default risk and less interest rate risk. E. the second bond will have a lower yield to maturity than the first bond.

Question 5

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"Spontaneous liabilities" Select one: A. are defined as "uses of funds" B. include notes payable and long-term debt C. increase only as the result of conscious efforts to increase debt D. increase as sales increase, without any special effort by management E. do not affect the firm's need for external financing.

Question 6

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Concerning the call provision on a corporate bond. . .
Select one: A. such a bond is riskier than an equivalent, non-callable bond. B. such a bond will have a lower yield to maturity than an equivalent, non-callable bond. C. such a bond will sell at a higher price than an equivalent, non-callable bond. D. investors will be unwilling to buy a callable bond. E. the bond will only be called if market interest rates rise.

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The yield to maturity on a bond is Select one: A. equal to the coupon interest rate B. equal to "the market rate" on bonds of equivalent risk C. an internal rate of return D. the expected rate of return on the bond E. Answers b, c, and d are all correct.

Question 8

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The actual return on a bond will equal its expected return only if Select one: A. All promised interest and principal payments are actually received. B. Interest payments, as received, are reinvested at the expected rate of return C. Both a and b, above, occur. D. The actual return will always equal the expected return as long as the bond is not called and the issuer does not default. E. Interest payments are reinvested at a rate higher than the expected return.

Question 9

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A firm's current sales are $200,000; assets are now $50,000. The company is operating at 70% of capacity. If the company plans to increase sales by 50%, by how much will assets have to increase? Select one: A. Assets will not need to increase at all. B. By $100,000 C. By $2,500 D. By $85,700 E. By $10,725

Question 10

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Current sales are $3.5 million and management hopes to increase sales by 20%. Net income is $140,000 and dividends are $42,000. If sales increase as expected and balance sheet and income statement relationships do not change, by how much will the company's retained earnings increase? Select one: A. $117,600 B. $50,400 C. $168,000 D. $98,000 E. $126,000

Question 4

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Consider two bonds. One is a AA-rated, 5-year bond; the other is a BBB-rated 15-year bond. Concerning the risk of these two bonds: Select one: A. the first bond has more default risk. B. the first bond has less interest rate risk but more default risk. C. the second bond has more default risk but less interest rate risk. D. the first bond has both less default risk and less interest rate risk. E. the second bond will have a lower yield to maturity than the first bond.

Question 5

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"Spontaneous liabilities" Select one: A. are defined as "uses of funds" B. include notes payable and long-term debt C. increase only as the result of conscious efforts to increase debt D. increase as sales increase, without any special effort by management E. do not affect the firm's need for external financing.

Question 6

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Concerning the call provision on a corporate bond. . .
Select one: A. such a bond is riskier than an equivalent, non-callable bond. B. such a bond will have a lower yield to maturity than an equivalent, non-callable bond. C. such a bond will sell at a higher price than an equivalent, non-callable bond. D. investors will be unwilling to buy a callable bond. E. the bond will only be called if market interest rates rise.

Question 7

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The yield to maturity on a bond is Select one: A. equal to the coupon interest rate B. equal to "the market rate" on bonds of equivalent risk C. an internal rate of return D. the expected rate of return on the bond E. Answers b, c, and d are all correct.

Question 8

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The actual return on a bond will equal its expected return only if Select one: A. All promised interest and principal payments are actually received. B. Interest payments, as received, are reinvested at the expected rate of return C. Both a and b, above, occur. D. The actual return will always equal the expected return as long as the bond is not called and the issuer does not default. E. Interest payments are reinvested at a rate higher than the expected return.

Question 9

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A firm's current sales are $200,000; assets are now $50,000. The company is operating at 70% of capacity. If the company plans to increase sales by 50%, by how much will assets have to increase? Select one: A. Assets will not need to increase at all. B. By $100,000 C. By $2,500 D. By $85,700 E. By $10,725

Question 10

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Current sales are $3.5 million and management hopes to increase sales by 20%. Net income is $140,000 and dividends are $42,000. If sales increase as expected and balance sheet and income statement relationships do not change, by how much will the company's retained earnings increase? Select one: A. $117,600 B. $50,400 C. $168,000 D. $98,000 E. $126,000

Question 4

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Consider two bonds. One is a AA-rated, 5-year bond; the other is a BBB-rated 15-year bond. Concerning the risk of these two bonds: Select one: A. the first bond has more default risk. B. the first bond has less interest rate risk but more default risk. C. the second bond has more default risk but less interest rate risk. D. the first bond has both less default risk and less interest rate risk. E. the second bond will have a lower yield to maturity than the first bond.

Question 5

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"Spontaneous liabilities" Select one: A. are defined as "uses of funds" B. include notes payable and long-term debt C. increase only as the result of conscious efforts to increase debt D. increase as sales increase, without any special effort by management E. do not affect the firm's need for external financing.

Question 6

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Concerning the call provision on a corporate bond. . .
Select one: A. such a bond is riskier than an equivalent, non-callable bond. B. such a bond will have a lower yield to maturity than an equivalent, non-callable bond. C. such a bond will sell at a higher price than an equivalent, non-callable bond. D. investors will be unwilling to buy a callable bond. E. the bond will only be called if market interest rates rise.

Question 7

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The yield to maturity on a bond is Select one: A. equal to the coupon interest rate B. equal to "the market rate" on bonds of equivalent risk C. an internal rate of return D. the expected rate of return on the bond E. Answers b, c, and d are all correct.

Question 8

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The actual return on a bond will equal its expected return only if Select one: A. All promised interest and principal payments are actually received. B. Interest payments, as received, are reinvested at the expected rate of return C. Both a and b, above, occur. D. The actual return will always equal the expected return as long as the bond is not called and the issuer does not default. E. Interest payments are reinvested at a rate higher than the expected return.

Question 9

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A firm's current sales are $200,000; assets are now $50,000. The company is operating at 70% of capacity. If the company plans to increase sales by 50%, by how much will assets have to increase? Select one: A. Assets will not need to increase at all. B. By $100,000 C. By $2,500 D. By $85,700 E. By $10,725

Question 10

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Current sales are $3.5 million and management hopes to increase sales by 20%. Net income is $140,000 and dividends are $42,000. If sales increase as expected and balance sheet and income statement relationships do not change, by how much will the company's retained earnings increase? Select one: A. $117,600 B. $50,400 C. $168,000 D. $98,000 E. $126,000

Question 4

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Consider two bonds. One is a AA-rated, 5-year bond; the other is a BBB-rated 15-year bond. Concerning the risk of these two bonds: Select one: A. the first bond has more default risk. B. the first bond has less interest rate risk but more default risk. C. the second bond has more default risk but less interest rate risk. D. the first bond has both less default risk and less interest rate risk. E. the second bond will have a lower yield to maturity than the first bond.

Question 5

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"Spontaneous liabilities" Select one: A. are defined as "uses of funds" B. include notes payable and long-term debt C. increase only as the result of conscious efforts to increase debt D. increase as sales increase, without any special effort by management E. do not affect the firm's need for external financing.

Question 6

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Concerning the call provision on a corporate bond. . .
Select one: A. such a bond is riskier than an equivalent, non-callable bond. B. such a bond will have a lower yield to maturity than an equivalent, non-callable bond. C. such a bond will sell at a higher price than an equivalent, non-callable bond. D. investors will be unwilling to buy a callable bond. E. the bond will only be called if market interest rates rise.

Question 7

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The yield to maturity on a bond is Select one: A. equal to the coupon interest rate B. equal to "the market rate" on bonds of equivalent risk C. an internal rate of return D. the expected rate of return on the bond E. Answers b, c, and d are all correct.

Question 8

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The actual return on a bond will equal its expected return only if Select one: A. All promised interest and principal payments are actually received. B. Interest payments, as received, are reinvested at the expected rate of return C. Both a and b, above, occur. D. The actual return will always equal the expected return as long as the bond is not called and the issuer does not default. E. Interest payments are reinvested at a rate higher than the expected return.

Question 9

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A firm's current sales are $200,000; assets are now $50,000. The company is operating at 70% of capacity. If the company plans to increase sales by 50%, by how much will assets have to increase? Select one: A. Assets will not need to increase at all. B. By $100,000 C. By $2,500 D. By $85,700 E. By $10,725

Question 10

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Current sales are $3.5 million and management hopes to increase sales by 20%. Net income is $140,000 and dividends are $42,000. If sales increase as expected and balance sheet and income statement relationships do not change, by how much will the company's retained earnings increase? Select one: A. $117,600 B. $50,400 C. $168,000 D. $98,000 E. $126,000

Question 4

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Consider two bonds. One is a AA-rated, 5-year bond; the other is a BBB-rated 15-year bond. Concerning the risk of these two bonds: Select one: A. the first bond has more default risk. B. the first bond has less interest rate risk but more default risk. C. the second bond has more default risk but less interest rate risk. D. the first bond has both less default risk and less interest rate risk. E. the second bond will have a lower yield to maturity than the first bond.

Question 5

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"Spontaneous liabilities" Select one: A. are defined as "uses of funds" B. include notes payable and long-term debt C. increase only as the result of conscious efforts to increase debt D. increase as sales increase, without any special effort by management E. do not affect the firm's need for external financing.

Question 6

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Concerning the call provision on a corporate bond. . .
Select one: A. such a bond is riskier than an equivalent, non-callable bond. B. such a bond will have a lower yield to maturity than an equivalent, non-callable bond. C. such a bond will sell at a higher price than an equivalent, non-callable bond. D. investors will be unwilling to buy a callable bond. E. the bond will only be called if market interest rates rise.

Question 7

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The yield to maturity on a bond is Select one: A. equal to the coupon interest rate B. equal to "the market rate" on bonds of equivalent risk C. an internal rate of return D. the expected rate of return on the bond E. Answers b, c, and d are all correct.

Question 8

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The actual return on a bond will equal its expected return only if Select one: A. All promised interest and principal payments are actually received. B. Interest payments, as received, are reinvested at the expected rate of return C. Both a and b, above, occur. D. The actual return will always equal the expected return as long as the bond is not called and the issuer does not default. E. Interest payments are reinvested at a rate higher than the expected return.

Question 9

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A firm's current sales are $200,000; assets are now $50,000. The company is operating at 70% of capacity. If the company plans to increase sales by 50%, by how much will assets have to increase? Select one: A. Assets will not need to increase at all. B. By $100,000 C. By $2,500 D. By $85,700 E. By $10,725

Question 10

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Current sales are $3.5 million and management hopes to increase sales by 20%. Net income is $140,000 and dividends are $42,000. If sales increase as expected and balance sheet and income statement relationships do not change, by how much will the company's retained earnings increase? Select one: A. $117,600 B. $50,400 C. $168,000 D. $98,000 E. $126,000

Question 4

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Consider two bonds. One is a AA-rated, 5-year bond; the other is a BBB-rated 15-year bond. Concerning the risk of these two bonds: Select one: A. the first bond has more default risk. B. the first bond has less interest rate risk but more default risk. C. the second bond has more default risk but less interest rate risk. D. the first bond has both less default risk and less interest rate risk. E. the second bond will have a lower yield to maturity than the first bond.

Question 5

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"Spontaneous liabilities" Select one: A. are defined as "uses of funds" B. include notes payable and long-term debt C. increase only as the result of conscious efforts to increase debt D. increase as sales increase, without any special effort by management E. do not affect the firm's need for external financing.

Question 6

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Concerning the call provision on a corporate bond. . .
Select one: A. such a bond is riskier than an equivalent, non-callable bond. B. such a bond will have a lower yield to maturity than an equivalent, non-callable bond. C. such a bond will sell at a higher price than an equivalent, non-callable bond. D. investors will be unwilling to buy a callable bond. E. the bond will only be called if market interest rates rise.

Question 7

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The yield to maturity on a bond is Select one: A. equal to the coupon interest rate B. equal to "the market rate" on bonds of equivalent risk C. an internal rate of return D. the expected rate of return on the bond E. Answers b, c, and d are all correct.

Question 8

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The actual return on a bond will equal its expected return only if Select one: A. All promised interest and principal payments are actually received. B. Interest payments, as received, are reinvested at the expected rate of return C. Both a and b, above, occur. D. The actual return will always equal the expected return as long as the bond is not called and the issuer does not default. E. Interest payments are reinvested at a rate higher than the expected return.

Question 9

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A firm's current sales are $200,000; assets are now $50,000. The company is operating at 70% of capacity. If the company plans to increase sales by 50%, by how much will assets have to increase? Select one: A. Assets will not need to increase at all. B. By $100,000 C. By $2,500 D. By $85,700 E. By $10,725

Question 10

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Current sales are $3.5 million and management hopes to increase sales by 20%. Net income is $140,000 and dividends are $42,000. If sales increase as expected and balance sheet and income statement relationships do not change, by how much will the company's retained earnings increase? Select one: A. $117,600 B. $50,400 C. $168,000 D. $98,000 E. $126,000

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Consider two bonds. One is a AA-rated, 5-year bond; the other is a BBB-rated 15-year bond. Concerning the risk of these two bonds: Select one: A. the first bond has more default risk. B. the first bond has less interest rate risk but more default risk. C. the second bond has more default risk but less interest rate risk. D. the first bond has both less default risk and less interest rate risk. E. the second bond will have a lower yield to maturity than the first bond.

Question 4

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Consider two bonds. One is a AA-rated, 5-year bond; the other is a BBB-rated 15-year bond. Concerning the risk of these two bonds: Select one: A. the first bond has more default risk. B. the first bond has less interest rate risk but more default risk. C. the second bond has more default risk but less interest rate risk. D. the first bond has both less default risk and less interest rate risk. E. the second bond will have a lower yield to maturity than the first bond.

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Consider two bonds. One is a AA-rated, 5-year bond; the other is a BBB-rated 15-year bond. Concerning the risk of these two bonds: Select one: A. the first bond has more default risk. B. the first bond has less interest rate risk but more default risk. C. the second bond has more default risk but less interest rate risk. D. the first bond has both less default risk and less interest rate risk. E. the second bond will have a lower yield to maturity than the first bond. Consider two bonds. One is a AA-rated, 5-year bond; the other is a BBB-rated 15-year bond. Concerning the risk of these two bonds: Select one: A. the first bond has more default risk. B. the first bond has less interest rate risk but more default risk. C. the second bond has more default risk but less interest rate risk. D. the first bond has both less default risk and less interest rate risk. E. the second bond will have a lower yield to maturity than the first bond. Select one: A. the first bond has more default risk. B. the first bond has less interest rate risk but more default risk. C. the second bond has more default risk but less interest rate risk. D. the first bond has both less default risk and less interest rate risk. E. the second bond will have a lower yield to maturity than the first bond. A. the first bond has more default risk. B. the first bond has less interest rate risk but more default risk. C. the second bond has more default risk but less interest rate risk. D. the first bond has both less default risk and less interest rate risk. E. the second bond will have a lower yield to maturity than the first bond.

Question 5

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"Spontaneous liabilities" Select one: A. are defined as "uses of funds" B. include notes payable and long-term debt C. increase only as the result of conscious efforts to increase debt D. increase as sales increase, without any special effort by management E. do not affect the firm's need for external financing.

Question 5

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"Spontaneous liabilities" Select one: A. are defined as "uses of funds" B. include notes payable and long-term debt C. increase only as the result of conscious efforts to increase debt D. increase as sales increase, without any special effort by management E. do not affect the firm's need for external financing.

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"Spontaneous liabilities" Select one: A. are defined as "uses of funds" B. include notes payable and long-term debt C. increase only as the result of conscious efforts to increase debt D. increase as sales increase, without any special effort by management E. do not affect the firm's need for external financing. "Spontaneous liabilities" Select one: A. are defined as "uses of funds" B. include notes payable and long-term debt C. increase only as the result of conscious efforts to increase debt D. increase as sales increase, without any special effort by management E. do not affect the firm's need for external financing. Select one: A. are defined as "uses of funds" B. include notes payable and long-term debt C. increase only as the result of conscious efforts to increase debt D. increase as sales increase, without any special effort by management E. do not affect the firm's need for external financing. A. are defined as "uses of funds" B. include notes payable and long-term debt C. increase only as the result of conscious efforts to increase debt D. increase as sales increase, without any special effort by management E. do not affect the firm's need for external financing.

Question 6

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Concerning the call provision on a corporate bond. . .
Select one: A. such a bond is riskier than an equivalent, non-callable bond. B. such a bond will have a lower yield to maturity than an equivalent, non-callable bond. C. such a bond will sell at a higher price than an equivalent, non-callable bond. D. investors will be unwilling to buy a callable bond. E. the bond will only be called if market interest rates rise.

Question 6

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Concerning the call provision on a corporate bond. . .
Select one: A. such a bond is riskier than an equivalent, non-callable bond. B. such a bond will have a lower yield to maturity than an equivalent, non-callable bond. C. such a bond will sell at a higher price than an equivalent, non-callable bond. D. investors will be unwilling to buy a callable bond. E. the bond will only be called if market interest rates rise.

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Concerning the call provision on a corporate bond. . .
Select one: A. such a bond is riskier than an equivalent, non-callable bond. B. such a bond will have a lower yield to maturity than an equivalent, non-callable bond. C. such a bond will sell at a higher price than an equivalent, non-callable bond. D. investors will be unwilling to buy a callable bond. E. the bond will only be called if market interest rates rise. Concerning the call provision on a corporate bond. . .
Select one: A. such a bond is riskier than an equivalent, non-callable bond. B. such a bond will have a lower yield to maturity than an equivalent, non-callable bond. C. such a bond will sell at a higher price than an equivalent, non-callable bond. D. investors will be unwilling to buy a callable bond. E. the bond will only be called if market interest rates rise. Select one: A. such a bond is riskier than an equivalent, non-callable bond. B. such a bond will have a lower yield to maturity than an equivalent, non-callable bond. C. such a bond will sell at a higher price than an equivalent, non-callable bond. D. investors will be unwilling to buy a callable bond. E. the bond will only be called if market interest rates rise. A. such a bond is riskier than an equivalent, non-callable bond. B. such a bond will have a lower yield to maturity than an equivalent, non-callable bond. C. such a bond will sell at a higher price than an equivalent, non-callable bond. D. investors will be unwilling to buy a callable bond. E. the bond will only be called if market interest rates rise.

Question 7

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The yield to maturity on a bond is Select one: A. equal to the coupon interest rate B. equal to "the market rate" on bonds of equivalent risk C. an internal rate of return D. the expected rate of return on the bond E. Answers b, c, and d are all correct.

Question 7

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The yield to maturity on a bond is Select one: A. equal to the coupon interest rate B. equal to "the market rate" on bonds of equivalent risk C. an internal rate of return D. the expected rate of return on the bond E. Answers b, c, and d are all correct.

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The yield to maturity on a bond is Select one: A. equal to the coupon interest rate B. equal to "the market rate" on bonds of equivalent risk C. an internal rate of return D. the expected rate of return on the bond E. Answers b, c, and d are all correct. The yield to maturity on a bond is Select one: A. equal to the coupon interest rate B. equal to "the market rate" on bonds of equivalent risk C. an internal rate of return D. the expected rate of return on the bond E. Answers b, c, and d are all correct. Select one: A. equal to the coupon interest rate B. equal to "the market rate" on bonds of equivalent risk C. an internal rate of return D. the expected rate of return on the bond E. Answers b, c, and d are all correct. A. equal to the coupon interest rate B. equal to "the market rate" on bonds of equivalent risk C. an internal rate of return D. the expected rate of return on the bond E. Answers b, c, and d are all correct.

Question 8

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The actual return on a bond will equal its expected return only if Select one: A. All promised interest and principal payments are actually received. B. Interest payments, as received, are reinvested at the expected rate of return C. Both a and b, above, occur. D. The actual return will always equal the expected return as long as the bond is not called and the issuer does not default. E. Interest payments are reinvested at a rate higher than the expected return.

Question 8

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The actual return on a bond will equal its expected return only if Select one: A. All promised interest and principal payments are actually received. B. Interest payments, as received, are reinvested at the expected rate of return C. Both a and b, above, occur. D. The actual return will always equal the expected return as long as the bond is not called and the issuer does not default. E. Interest payments are reinvested at a rate higher than the expected return.

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The actual return on a bond will equal its expected return only if Select one: A. All promised interest and principal payments are actually received. B. Interest payments, as received, are reinvested at the expected rate of return C. Both a and b, above, occur. D. The actual return will always equal the expected return as long as the bond is not called and the issuer does not default. E. Interest payments are reinvested at a rate higher than the expected return. The actual return on a bond will equal its expected return only if Select one: A. All promised interest and principal payments are actually received. B. Interest payments, as received, are reinvested at the expected rate of return C. Both a and b, above, occur. D. The actual return will always equal the expected return as long as the bond is not called and the issuer does not default. E. Interest payments are reinvested at a rate higher than the expected return. Select one: A. All promised interest and principal payments are actually received. B. Interest payments, as received, are reinvested at the expected rate of return C. Both a and b, above, occur. D. The actual return will always equal the expected return as long as the bond is not called and the issuer does not default. E. Interest payments are reinvested at a rate higher than the expected return. A. All promised interest and principal payments are actually received. B. Interest payments, as received, are reinvested at the expected rate of return C. Both a and b, above, occur. D. The actual return will always equal the expected return as long as the bond is not called and the issuer does not default. E. Interest payments are reinvested at a rate higher than the expected return.

Question 9

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A firm's current sales are $200,000; assets are now $50,000. The company is operating at 70% of capacity. If the company plans to increase sales by 50%, by how much will assets have to increase? Select one: A. Assets will not need to increase at all. B. By $100,000 C. By $2,500 D. By $85,700 E. By $10,725

Question 9

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A firm's current sales are $200,000; assets are now $50,000. The company is operating at 70% of capacity. If the company plans to increase sales by 50%, by how much will assets have to increase? Select one: A. Assets will not need to increase at all. B. By $100,000 C. By $2,500 D. By $85,700 E. By $10,725

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A firm's current sales are $200,000; assets are now $50,000. The company is operating at 70% of capacity. If the company plans to increase sales by 50%, by how much will assets have to increase? Select one: A. Assets will not need to increase at all. B. By $100,000 C. By $2,500 D. By $85,700 E. By $10,725 A firm's current sales are $200,000; assets are now $50,000. The company is operating at 70% of capacity. If the company plans to increase sales by 50%, by how much will assets have to increase? Select one: A. Assets will not need to increase at all. B. By $100,000 C. By $2,500 D. By $85,700 E. By $10,725 Select one: A. Assets will not need to increase at all. B. By $100,000 C. By $2,500 D. By $85,700 E. By $10,725 A. Assets will not need to increase at all. B. By $100,000 C. By $2,500 D. By $85,700 E. By $10,725

Question 10

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Current sales are $3.5 million and management hopes to increase sales by 20%. Net income is $140,000 and dividends are $42,000. If sales increase as expected and balance sheet and income statement relationships do not change, by how much will the company's retained earnings increase? Select one: A. $117,600 B. $50,400 C. $168,000 D. $98,000 E. $126,000

Question 10

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Current sales are $3.5 million and management hopes to increase sales by 20%. Net income is $140,000 and dividends are $42,000. If sales increase as expected and balance sheet and income statement relationships do not change, by how much will the company's retained earnings increase? Select one: A. $117,600 B. $50,400 C. $168,000 D. $98,000 E. $126,000

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Current sales are $3.5 million and management hopes to increase sales by 20%. Net income is $140,000 and dividends are $42,000. If sales increase as expected and balance sheet and income statement relationships do not change, by how much will the company's retained earnings increase? Select one: A. $117,600 B. $50,400 C. $168,000 D. $98,000 E. $126,000 Current sales are $3.5 million and management hopes to increase sales by 20%. Net income is $140,000 and dividends are $42,000. If sales increase as expected and balance sheet and income statement relationships do not change, by how much will the company's retained earnings increase? Select one: A. $117,600 B. $50,400 C. $168,000 D. $98,000 E. $126,000 Select one: A. $117,600 B. $50,400 C. $168,000 D. $98,000 E. $126,000 A. $117,600 B. $50,400 C. $168,000 D. $98,000 E. $126,000

Explanation / Answer

Question 1-(E)

Question 2-(D)

Question 3-(D)

Question 4-(B)

Question 5-(C)

Question 6-(A)

Question 7-(E)

Question 8-(C)

Question 9-(D)

Question 10-(E)

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