Interest expense creates magnification of earnings through financial leverage because:
a. the interest rate is variable.
b. interest accompanies debt financing.
c. the use of interest causes higher earnings.
d. interest costs are cheaper than the required rate of return to equity owners.
e. while earnings available to pay interest rise, earnings to residual owners rise faster.
E
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FOB shipping point means that the buyer accepts ownership when the goods arrive at the buyer's place of business.
Answer the following statement true (T) or false (F)
Which of the following is an observable feature in the Globalization 3.0 stage?
A. The typical firm has reorganized from a global enterprise with different centers of expertise to a multinational company with self-contained operations in a few selected countries. B. Knowledge flow between the local replicas of the multinational enterprises and their U.S. headquarters is limited. C. Based on an optimal mix of costs, skills, and PESTEL factors, companies now freely locate business functions anywhere in the world. D. Only sales and distribution functions of a multinational enterprise are located in a few key countries.
Sebastian has been appointed the promotional director for the nonprofit youth string musician organization with which his son plays cello. The organization has three string ensembles and a larger string orchestra that all of the children participate in. Because money is very tight with the organization, the children perform at rest homes, assisted living facilities, and public schools. Occasionally, he is able to secure performance opportunities at businesses as part of a cross-promotion for youth-related campaigns such as Autism Awareness. Whenever the organization performs, Sebastian takes a picture and sends it with a caption to the local newspaper. He sends the newspaper a news release prior to the event and usually follows up with an article about the organization after the event.
Over the years, the newspaper has sent various news reporters to the home of the string director to interview her about the organization and the reason it was formed. The articles written by the reporters are quite lengthy and often include pictures of the director, the children performing, and the board of directors. What type of promotional activity is Sebastian using to promote the nonprofit organization? A. Sales promotion B. Personal selling C. Public relations D. Advertising
Bolander Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data:Total machine-hours70,000Total fixed manufacturing overhead cost$ 294,000Variable manufacturing overhead per machine-hour$ 2.30 Recently, Job M825 was completed with the following characteristics:Number of units in the job20Total machine-hours80Direct materials$ 665Direct labor cost$ 1,840The predetermined overhead rate is closest to:
A. $2.30 per machine-hour B. $4.20 per machine-hour C. $8.80 per machine-hour D. $6.50 per machine-hour