Break-even analysis requires knowing the relationship between
a. sales and total costs.
The greater the degree of operating leverage, the larger is the variability of
a. operating income
Owners in which of the following forms of business have unlimited li
Inflow = $15407
Discounting factor = 10%
PVF @10 % for 2 year = 0.8264
Present value = $15407 * 0.8264 = $12732.34
(-) cash outflow in present year = $10000
Inflow = $19390
Discounting factor = 1
If the net present values of two mutually exclusive investments are positive, a firm should select
a. the investment with the higher net present value.
Based on the information, if the investments are mutually exclusive, the firm should select
a. the high
1. Which of the following is a correct statement about default?
a. Default is failure to meet any of the terms of the indenture.
The value of common stock depends on the
a. present value of cash flows.
A common stock costs $40.50, the current dividend is
1. If a nation exports fewer goods than it imports, it experiences
A. Outflow of currency
Which of the following statements about pension plans is correct?
a. A pension plan that grants mortgage loans is an example of a financial intermediary.