Typically, debt financing requires:
A. a degree of ownership in the firm.
B. an asset as collateral.
C. reduction of short-term assets.
D. reduction of working capital.
Answer: B
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Arax Group of Companies (AGC) has a group incentive plan for its employees. Under this plan, the company sets aside a portion of its profits and divides it among employees. Which of the following plans has the company adopted?
A. A profit-sharing plan B. A defined-benefit pension plan C. An employee stock ownership plan D. A gainsharing plan
The Ford Pinto exploded when rear-ended by another vehicle. The Pinto suffered from a(an):
a. Design Defect b. Manufacturing Defect c. Warning Defect d. End-user Defect
Which of the following is one of the key activities of a financial manager?
A) making financing decisions B) managing cost accounting C) managing financial accounting D) making legal policy decisions
Assume a building is subject to § 1250 depreciation recapture because bonus depreciation [§ 168(k) was used]. The building is destroyed in a hurricane and this is the taxpayer's only casualty or theft for the year. In which of the following situations could there be a § 1250 depreciation recapture gain?
a. There is a loss because the insurance recovery is less than the adjusted basis. b. There is a gain because the insurance recovery exceeds the adjusted basis. c. Because of the length of time the building has been held, there is no remaining additional depreciation. d. There is no insurance recovery and the adjusted basis of the building is greater than zero. e. None of the above.