Interest rate swaps allow a firm to exchange fixed for floating-rate payments, but a swap cannot reduce actual net interest expenses.
Answer the following statement true (T) or false (F)
False
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The duty to mitigate damages:
A. allows the non-breaching party to waive his or her right to insist on complete performance. B. requires the plaintiff to recover damages only in case of physical injuries. C. requires the plaintiff to do so without undue risk, expense, or humiliation. D. is not applicable unless the defendant had reason to foresee them at the time the contract was created.
In a statement of cash flows, which of the following would increase reported cash flows from operating activities using the direct method?
a. Collection of a note receivable b. Dividends received from investments c. Gain on purchase of treasury stock d. Gain on sale of equipment
Beta Inc. can produce a unit of Zed for the following costs: Direct material$10 Direct labor 20 Overhead 50 Total costs per unit$80 An outside supplier offers to provide Beta with all the Zed units it needs at $58 per unit. If Beta buys from the supplier, it will still incur 40% of its overhead. Beta should:
A. Buy Zed since the relevant cost to make it is $60. B. Make Zed since the relevant cost to make it is $30. C. Make Zed since the relevant cost to make it is $60. D. Buy Zed since the relevant cost to make it is $30. E. Buy Zed since the relevant cost to make it is $80.
Which is the better approach to diversification-a strategy of related diversification or a strategy of unrelated diversification? Explain and support your answer.
What will be an ideal response?