The purpose of the restrictive debt covenant that imposes fixed assets restrictions is to ________.
A) protect the lender by controlling the risk and marketability of the borrower's security investment alternatives
B) limit the amount of fixed-payment obligations
C) ensure a cash shortage does not cause an inability to meet current obligations
D) prevent the firm from liquidation and ensure its ability to repay the debt
D) prevent the firm from liquidation and ensure its ability to repay the debt
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Briefly explain a "big bath" including when it occurs and why it occurs
Brand loyalty is known as a one way street where a consumer is committed to the brand.
a. True b. False
Some of the posttest methods for measuring advertising effectiveness are based on how well consumers remember advertising and include (1) recognition tests and (2) recall tests. What is the basic difference between these two approaches?
A. The actual ads are shown in the former but not in the latter. B. The former method relies on memory alone, and the latter shows the actual ads. C. One uses a consumer jury; the other uses random individuals. D. The respondents are given class clues in the latter but not in the former. E. One is used primarily by the government, and the other is used by private businesses.
Which of the following is true of leverage?
A) It refers to the effects that operating and financial fixed costs have on the returns that shareholders earn. B) It is associated with risks which are out of the control of managers. C) It includes the effect of operating fixed costs on the returns of shareholders and not the financial fixed costs. D) It is used to evaluate the profitability associated with various levels of sales.