Which of the following is NOT an example of a form of political risk that might be avoided or reduced by foreign exchange risk management?
A) expropriation of assets
B) destruction of raw materials through natural disaster
C) war
D) unfavorable legal changes
Answer: B
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Mulvaney Inc ignored the effect of income taxes in its calculation of the sales volume needed to achieve a target profit of $1,000,000. If the company considers the impact of income taxes in its calculation, which of the following statements would be true?
A) Total fixed costs will increase. B) Contribution margin per unit will decrease. C) Sales volume will increase to reach an after-tax profit. D) Sales price per unit will decrease.
For a given level of EBIT, greater changes in EPS produce
A) a decline in the degree of operating leverage. B) a decline in the degree of financial leverage. C) an increase in the degree of operating leverage. D) no effect on any type of leverage. E) an increase in the degree of financial leverage.
Sunnyside Co.'s comparative balance sheet indicated that the Equipment account increased by $112,000. Upon further investigation of the account changes, it is determined that Sunnyside purchased equipment totaling $196,000 for the year. It also sold equipment with an original cost of $84,000 for $22,400 cash. Assuming these are the only transactions affecting the investing activities, Sunnyside will report net cash flows provided by (used in) investing activities of:
A. ($112,000). B. ($89,600). C. ($196,000). D. ($173,600).
The mean of the sample
a. is always smaller than the mean of the population from which the sample was taken. b. can never be zero. c. can never be negative. d. can assume any value between the highest and the lowest value in the sample.