Answer the following statements true (T) or false (F)
1. An increase in a firm's risk will always result in a higher share price since the stockholder must be compensated for the greater risk.
2. When considering a firm's financial decision alternative, financial managers should accept only those actions that are expected to increase the firm's profitability.
3. A treasurer is responsible for the firm's accounting activities, such as corporate accounting, tax management, financial accounting, and cost accounting.
4. Financing decisions deal with the left-hand side of the firm's balance sheet.
5. You own a building supply store. Today you sold construction materials to a contractor for $10,000 that you acquired a week ago for $8,000. You paid for the materials in cash, but you sold them to the contractor on credit, and you expect him to pay his bill in a few months. Based on this information during the week you earned a positive profit but experienced a negative cash flow.
1. FALSE
2. FALSE
3. FALSE
4. FALSE
5. TRUE
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Total liabilities divided by total stockholders' equity is the calculation for the
a. current ratio. b. ratio of liabilities to stockholders' equity. c. return on equity ratio. d. times interest earned ratio.
Parallel importing occurs when companies employ a(n) ________ multinational pricing policy that calls for setting different prices in different country markets
A) ethnocentric B) polycentric C) regiocentric D) geocentric E) extension
Service providers invest large amounts of money in training employees because ________.
A. they lose business and revenue if they do not meet the service expectations of customers B. consumers act on impulse and purchase any product or service that they desire to buy C. they are unaffected by the economic recession and massive job losses D. a larger number of consumers are opting to buy rather than rent homes and cars
The Reagan administration in the 1980s contributed to the economic crisis of 2008 by _______
A. initiating subprime mortgages B. decreasing the net capital rule C. removing many regulations for banks D. encouraging China to underwrite U.S. debt