Which of the following statements is CORRECT?
A. Suppose a firm is operating its fixed assets at below 100% of capacity, but it has no excess current assets. Based on the AFN equation, its AFN will be larger than if it had been operating with excess capacity in both fixed and current assets.
B. If a firm retains all of its earnings, then it cannot require any additional funds to support sales growth.
C. Additional funds needed (AFN) are typically raised using a combination of notes payable, long-term debt, and common stock. Such funds are non-spontaneous in the sense that they require explicit financing decisions to obtain them.
D. If a firm has a positive free cash flow, then it must have either a zero or a negative AFN.
E. Since accounts payable and accrued liabilities must eventually be paid off, as these accounts increase, AFN as calculated by the AFN equation must also increase.
Answer: C
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William Robinson is the coach of a high school baseball team. His team is one win away from a perfect season. Coach Robinson has informed the team that if they lose this last game they will each have to do 100 push-ups and run 5 miles after the game. He has warned them that if they lose and someone does not comply, then he will not participate in the playoffs. What type of power is Coach Robinson using?
a. coercive b. reward c. expert d. personal
Based on the following, what is the total direct materials variance?
A) $150 U
B) $300 F
C) $150 F
D) $300 U
When calculating the break-even point in a multi-product environment, which of the following statements is false?
A) The contribution margin per unit for each product needs to be determined. B) Total fixed costs need to be determined. C) Each product is assumed to count for an equal percentage of total sales. D) The weighted-average contribution margin per unit needs to be determined.
During crisis situations, the generation of alternatives
a. tends to be increased b. is stopped completely—as a general rule, even the best crisis leaders do not generate alternatives during crisis situations c. becomes more logical and orderly d. tends to be reduced