Which one of the following choice is capital budgeting decision? A) Avon spends

Question

Which one of the following choice is capital budgeting decision? A) Avon spends 200 million to launch a new range of cosmetics in European markets. B) Pfizer issues new shares to buy a small biotech company. C) BMW borrows 350 million euros (350 million) from Deutsche Bank. D) Apple raises 91million through initial public offering. When Patricia sells her General Motors common stock at the same time that Brian purchases the same amount of GM stock, GM receives: fees. A) the dollar amount of the transaction, less brokerage B) only the par value of the common stock. C) the dollar value of the transaction. D) nothing. Double taxation" refers to: A) corporations paying taxes on both dividends and retained earnings. B) the fact that marginal tax rates are doubled for corporations. C) paying taxes on profits at the corporate level and dividends at the personal level. D) all partners paying equal taxes on profits Which one of the following is a financial asset? A) A machine C) A patent B) A corporate bond D) A factory corporation is considered to be closely held when: A) management also serves as the board of directors. B) it operates in a small geographic area. C) only a few shareholders exist. D) the market value of the shares is stable. n general, what is changing as you read down the left-hand side of a balance sheet? A) The assets are increasing in maturity B) The assets are becoming more fully depreciated. C) The assets are increasing in value. D) The assets are becoming less liquid balance sheet may be considered backward-looking from the perspective that it A) works backward, starting with net income. B) records costs over many previous periods. C) records historic, not current values. D) cannot forecast the future.

Explanation / Answer

Q1. A) is capital budgeting decision

Q2. D) Nothing

Q3. A) Corporations paying taxes on both dividend and retained earnings

Q4. B) Corporate bond is a financial asset

Q5. C) Only a few shareholders exist.

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