A firm with variable-rate debt that expects interest rates to rise may engage in a swap agreement to:
A) pay fixed-rate interest and receive floating rate interest.
B) pay floating rate and receive fixed rate.
C) pay fixed rate and receive fixed rate.
D) pay floating rate and receive floating rate.
Answer: A
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Which of the following is not an area in which change is often needed?
A. Strategy B. Information C. People D. Structure E. Technology
The following covenants are extracted from the indenture for McMorris Industries' 20 year-bond. The indenture provides that failure to comply with its terms in any respect automatically advances the due date of the loan to the date of noncompliance. REQUIRED: Assume that each of these is an independent scenario and identify the audit steps that should be taken or reporting requirements necessary
in connection with (a) through (d). a. The debtor company shall endeavor to maintain a working capital ratio of 2.5 to 1 at all times, and, in any fiscal year following a failure to maintain this ratio, the company shall restrict compensation of the CEO and executive officers to a total of no more than $1,000,000 . Executive officers for this purpose shall include the chairman of the board of directors, the president, all vice presidents, the secretary, and the treasurer. b. The debtor company shall insure all property that is security for this debt against loss by hurricane to the extent of 90% of its actual value. Insurance policies securing this protection shall be filed with the trustee. c. The debtor company shall pay all taxes legally assessed against the property that serves as security for this debt within the time provided by law for payment without penalty and shall deposit receipted tax bills or equally acceptable evidence of payment of same with the trustee. d. A sinking fund shall be established and deposited with the trustee by semiannual payments of $450,000, from which the trustee shall, at his/her discretion, purchase bonds of this issue.
Which of the following is necessary for an effective CVP?
a. It must include various pricing options. b. It must have the ability to perform over a considerable length of time. c. It must delivered with greater speed than the competitors. d. It must be delivered with more sophisticated technology than the competitors.
The primary reason for the general lack of design for remanufacturing is that remanufacturing is more expensive for a manufacturer
Indicate whether the statement is true or false.