Using debt and preferred stock in the capital structure of a firm will _____.
A. increase financial risk
B. decrease business risk
C. increase the tax payable by the firm.
D. decrease operating leverage
E. increase the book value of common stock
Answer: A
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PNFI statistic is most useful for comparing nested models
Indicate whether the statement is true or false
How would the collection of an account receivable affect the current ratio and the quick ratio, respectively?
a. No effect on current ratio; increase in quick ratio b. Increase in current ratio; increase in quick ratio c. No effect on current ratio; no effect on quick ratio d. Decrease in current ratio; decrease in quick ratio
Plant assets refer to nonphysical assets that are used in the operations of a business.
Answer the following statement true (T) or false (F)
Strama, Inc., manufactures and sells two products: Product A6 and Product I5. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: EstimatedExpected ActivityActivity Cost PoolsActivity MeasuresOverhead CostProduct A6Product I5TotalLabor-relatedDLHs$179,1387,0001,6008,600Production ordersorders 38,624300500800Order sizeMHs 171,1474,4004,5008,900 $388,909 The activity rate for the Order Size activity cost pool under activity-based costing is closest to:
A. $111.96 per MH B. $45.22 per MH C. $21.25 per MH D. $19.23 per MH