Which of the following would be a self-financing option for a new venture?
a. Personal cash
b. Unsecured personal credit
c. Second mortgage on property
d. All of the above
d. All of the above
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Which of the following items would not be a reconciling item?
a. Canceled checks b. NSF checks c. Outstanding checks d. Deposits in transit
All of the following are components of audit risk except
a. control risk b. legal risk c. detection risk d. inherent risk
Which of the five behavioral sciences related to organizational behavior studies people and their activities in relation to societal, environmental, and cultural influences?
A. political science B. sociology C. social psychology D. anthropology
Repeat the Spuds and Suds Income Statement example from Chapter 7 with the following assumptions: price per unit and fixed costs are expected to increase by an average annual rate of inflation of 2%. Also assume that variable costs as a percent of sales will remain constant at 65%. Finally, suppose that Spuds and Suds is a firm in the early stage of business, and that unit sales are projected to grow at a rate of 20%, 15%, 10% and 5% for 2018-2021 respectively.
a) Create an income statement using the assumptions explained above. b) Calculate the operating break-even point in both units and dollars. c) How many units would Spuds and Suds need to sell in order to achieve earnings, before interest and taxes of $900,000? d) Calculate the degree of operating, financial, and combined leverage for each year. e) Create a chart that shows how the various leverage measures have changed over this five-year period.