The degree of financial leverage (DFL) is defined as the percentage change in ______ that results from a particular percentage change in _____.
A. earnings before interest and taxes (EBIT); sales
B. sales; earnings per share (EPS)
C. EPS; sales
D. EPS; EBIT
E. sales; EBIT
Answer: D
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Cadwell, Inc., a regional business computer sales firm is attempting to sell a convenience store chain, Gas 'N' Go, a new computer-operated pump meter. Terry Williams, owner of the convenience stores, seems interested in Cadwell's initial proposal but believes the price may be too high. The cost per computer is $1,000, but Cadwell could sell Williams 50 computers for $45,000 with terms of the sale being 2/10 net 30. Williams purchases 50 computers and pays for them five days after the purchase, so his ________ is $882.
A. cash discount B. breakeven cost C. trade discount D. unit cost E. gross profit
Firms often acquire derivative instruments to hedge interest rate, exchange rate, commodity price, and other risks. U.S. GAAP and IFRS classify derivatives into which of the following categories?
a. Fair value hedges of a recognized asset or liability or of an unrecognized firm commitment, only. b. Cash flow hedges of an existing asset or liability or of a forecasted transaction, only. c. Nonhedging derivative, only. d. Fair value hedges of a recognized asset or liability or of an unrecognized firm commitment, cash flow hedges of an existing asset or liability or of a forecasted transaction, and nonhedging derivative. e. none of the above
If the straight-line method of amortization of discount on bonds payable is used, the amount of yearly interest expense will increase as the bonds approach maturity
Indicate whether the statement is true or false
One of the biggest inhibitors to developing effective interpersonal skills is to have a boss you cannot get along with
Indicate whether the statement is true or false.