Day 47 Flashcards
What risks does a business face when only using equity financing?
Business Risk - associated with unique circumstances of a particular company, as they might affect the shareholder value of that company
MCQ-05591
The US dollar experienced a significant decline in exchange rates, what is the effect?
US exporters will benefit
A decline in the US dollar makes US goods cheaper allowing the foreign country to purchase more
MCQ-08344
An increase in supply of beef will result in?
An increase in quantity of beef demanded
A shift outward (increase) in supply = increases the quantity demanded and lowers the price
MCQ-03674
What is associated with (full) cost-based pricing?
- Fixed cost recovery
- Price stability
- Price justification
Note: Target pricing is not associated
MCQ-04266
Inherent Risk is associated with what risk Response?
Acceptance
MCQ-00586
Sales only equal total costs at the _____?
Breakeven Point
The Breakeven Point is when sales equal total costs
Sales will be lower (higher) than total costs prior to (beyond) the Breakeven Point
MCQ-07744
True or False: As inflation associated with a foreign economy increases in relation to a domestic economy, demand for foreign currency falls
True
Domestic currency has more purchasing power so the demand is higher
MCQ-03755
A company with high operating leverage will:
Have greater risk and greater potential return
High Operating Leverage = High Fixed Costs
MCQ-07773
Define: Equity Carbs Out
Requires an IPO with the patent company maintaining a controlling interest in the subsidiary
MCQ-04583
What risk can be reduced by diversification?
Labor Strikes
MCQ-06990
