Many banks offer free checking accounts. What may be the opportunity costs associated with free checking?
A) Low interest rates
B) Overdraft protection
C) High minimum balance requirements
D) Both A and C are correct answers.
Answer: D
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The founder of the upscale shoe company Harry's Shoes Ltd. persuaded actors to wear prototypes of his company's shoes to the Oscars. This shoe company believed that the actors would be ________ for the company
A) opinion leaders B) heuristics C) mass-classes D) stewards E) subcultures
Debentures always have specific assets of the issuing company pledged as collateral.
Answer the following statement true (T) or false (F)
Powers not given to the federal government by the U.S. Constitution are reserved to the states
Indicate whether the statement is true or false
Consider two firms, Go Debt corporation and No Debt corporation. Both firms are expected to have earnings before interest and taxes of $100,000 during the coming year
In addition, Go Debt is expected to incur $40,000 in interest expenses as a result of its borrowings whereas No Debt will incur no interest expense because it does not use debt financing. However, No Debt will have to pay stockholders $40,000 in dividend income. Both firms are in the 40 percent tax bracket. Calculate the Earnings after tax for both firms. Which firm has the higher after-tax earnings? Which firm appears to have the higher cash flow? How do you account for the difference?