Which of the following should be included in the initial outlay? A. Purchase price of new equipment B. Increased working capital requirements C. Pre-existing firm overhead reallocated to the new project D. A and B above
chose the correct anware .
1. Which of the following should be included in the initial outlay?
A. Purchase price of new equipment
B. Increased working capital requirements
C. Pre-existing firm overhead reallocated to the new project
D. A and B above
2. Which of the following is NOT included in the calculation of the initial outlay for a capital
budget?
A. Additional working-capital investments
B. Training expenses
C. Installation
D. All is included in the initial outlay
3. Dividend policy is influenced by:
A. a firm's capital structure mix.
B. a company's investment opportunities.
C. a company's availability of internally generated funds.
D. all of the above.
4.Which of the following dividend policies will cause dividends per share to fluctuate the
most?
A. Stable dollar dividend
B. Constant dividend payout ratio
C. Small, low, regular dividend plus a year-end extra
D. No difference between the various dividend policies
5.Which of the following statements would be consistent with the bird-in-the-hand dividend
theory?
A. Dividends are less certain than
B. Dividends are more certain than capital gains income
C. Investors are indifferent whether stock returns come from dividend income or capital
gains income
D. Wealthy investors prefer corporations to defer dividend payments because capital
gains produce greater after-tax income
6. Which of the following is the most valid reason to split a stock that has a market price of
RM110 per share?
A. Conserve cash
B. Obtain additional capital
C. Increase investor's net worth
D. Reduce the market price to a more popular trading range
7. A firm following an aggressive financing policy is
A not subject to any increased risks regarding cash shortiall
B. subject to a negligible increased risk of a cash shortfall
C. subject to increased risks of a cash shortfall
D. none of the above.
8. The risk-return trade-off in managing a firm's working capital involves which of the
following?
A A trade-off between debt and equity
B. A trade-off between liquidity and activity
C. A trade-off between the firm's liquidity and its profitability
D. None of the above
9. Which of the following statements about factoring is TRUE?
A. The borrowing firm can obtain a greater advance against inventory in a factoring
arrangement than in a typical line of credit secured by accounts receivable
B. The firm, not the factor bears the risk of collecting bad receivables in a factoring
arrangement
C. Factoring involves the outright sale of a firm's accounts receivable to the factor
D. Factoring firms sell the receivables of other firms
10. A company is technically insolvent when
A. current ratio is less than 1.0.
B.
C.earnings before interest payments are less than the interest payments.
D. it lacks the necessary liquidity to promptly pay its current debt obligations.
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