Which of the following statements is CORRECT?
A. Commercial paper is a form of short-term financing that is primarily used by large, strong, financially stable companies.
B. Short-term debt is favored by firms because, while it is generally more expensive than long-term debt, it exposes the borrowing firm to less risk than long-term debt.
C. Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.
D. Commercial paper is typically offered at a long-term maturity of at least five years.
E. Trade credit is provided only to relatively large, strong firms.
Answer: A
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Answer the following statement true (T) or false (F)
With the existence of fixed operating costs, an increase in sales will result in ________ increase in EBIT
A) a proportional B) an equal C) a less than proportional D) a more than proportional
The following partially completed T-accounts summarize transactions for Faaberg Corporation during the year: Raw MaterialsBeg Bal4,500 8,000 4,700 Work in ProcessBeg Bal3,600 21,700 5,700 8,000 7,800 Finished GoodsBeg Bal1,700 19,900 21,700 Manufacturing Overhead 2,300 7,800 3,000 2,700 Wages & Salaries Payable 19,900Beg Bal2,000 11,000 Cost of Goods SoldBeg Bal19,900 The manufacturing overhead was:
A. $2,700 overapplied B. $200 underapplied C. $2,700 underapplied D. $200 overapplied
Which of the following methods is not used to value a noncontrolling interest under circumstances where a control premium is applied to determine the appropriate value for such interest?
A. Valuation models based on subsidiary residual income projections. B. Valuation models based on subsidiary discounted cash flows. C. Comparison with comparable investments. D. Fair value based on market trades. E. The application of a safe harbor discount rate.