When Modigliani and Miller revised their original model to include taxes, they concluded that
A) firms should reduce their degree of financial leverage.
B) tax avoidance does not alter a firm's value.
C) tax increases lower a firm's value.
D) firms should use only debt in their capital structure.
E) taxes also have no bearing on the capital structure decision.
D
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What type of experiment is conducted when a food company offers a product for sale in a small geographic area to help it evaluate potential marketing actions?
A. experimental market B. test market C. trail market D. micro market E. simulated market
Ben received a $5,000 tuition scholarship from his local community college. He can exclude the $5,000 from gross income.
Answer the following statement true (T) or false (F)
Answer the following statements true (T) or false (F)
1. Cash should have a higher required return than accounts receivable because it is more liquid. 2. Inventory should have a higher required return than cash because it is less liquid. 3. Liquidity of an asset has nothing to do with measuring the required rate of return on the asset.
Canberry Corporation had net income of $80,000, beginning total assets of $640,000 and ending total assets of $580,000. Its return on total assets is:
A) 13.1% B) 12.5% C) 13.8% D) 800% E) 725%