Factoring of accounts receivable is an example of
A) a novation
B) an assignment
C) the privity rule
D) a venue clause
E) a breach of contract
B
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Firms with high levels of operating leverage experience which of the following in comparison to firms with low levels of operating leverage
a. Higher levels of risk in operations. b. Lower expected rates of return. c. Lower variability in returns on assets. d. Higher sales.
Closing entries will
a. decrease the Retained Earnings balance. b. most likely either increase or decrease the Retained Earnings balance. c. not affect the Retained Earnings balance. d. increase the Retained Earnings balance.
How might measuring service quality be more difficult than measuring product quality?
What will be an ideal response?
Which of the following statements concerning risk management is NOT CORRECT?
A. Risk management can reduce the volatility of cash flows, and this decreases the probability of bankruptcy. B. Risk management makes sense for firms directly engaged in activities that involve commodities whose values can be hedged, but it doesn't make much sense for most other firms. C. Companies with volatile earnings pay more taxes than companies with more stable earnings due to the treatment of tax credits and the rules governing corporate loss carry-forwards and carry-backs. Therefore, our tax system encourages risk management to stabilize earnings. D. Risk management can reduce the likelihood of low cash flows, and therefore reduce the probability of financial distress. E. Risk management involves identifying events that could have adverse financial consequences and then taking actions to prevent and/or to minimize the damage caused by these events.