Bond indentures include restrictive covenants.These provisions protect the bondholders against ________.
A) increase in inflation rate
B) increase in borrower's risk
C) decrease in liquidity risk
D) maturity risk
B) increase in borrower's risk
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Concerning purchase discounts, which one of the following statements is true?
A) Purchase discounts taken should be deducted from the acquisition cost of the inventory. B) The net price method results in recording accounts payable at the maximum value of the liability that the company may be required to pay out. C) Purchase discounts lost should be included in the cost of inventory. D) An advantage of the gross price method is that it isolates purchase discounts lost and thus highlights inefficiencies.
Performance measures such as average response times, repair times, and percent defective are referred to as:
A) benchmarks. B) metrics. C) targets. D) tactics.
Louisiana Enterprises, an all-equity firm, is considering a new capital investment. Analysis has indicated that the proposed investment has a beta of 0.55 and will generate an expected return of 5.00%. The firm currently has a required return of 10.75% and a beta of 1.25. The investment, if undertaken, will double the firm's total assets. If rRF is 7.00% and the market risk premium is 5%, should the firm undertake the investment?
A. Yes; the beta of the asset will reduce the risk of the firm. B. No; the expected return of the asset is less than the firm's required return, which is 10.75%. C. No; the expected return of the asset (5.00%) is less than the required return (9.64%). D. No; the risk of the asset (beta) will increase the firm's beta. E. Yes; the expected return of the asset (5.00%) exceeds the required return (4.50%).
Passwords and authorization codes are examples of logical security controls
Indicate whether the statement is true or false