Creditors are primarily interested in short-term liquidity of the company and its ability to make interest and principal payments
Indicate whether the statement is true or false
TRUE
You might also like to view...
Concerning foreign exchange trading, a "forward contract"
a. has no defined expiration date at which settlement must occur. b. has contract costs based on the brokerage fees for sell and buy orders. c. is issued by a major commercial bank, like Citibank or Barclays. d. is traded on IMM’s market floor.
The Factory Overhead account debit balance is not extended to the income statement on the worksheet
Indicate whether the statement is true or false
Merriwether Building has operating income of $20 million, a tax rate of 25%, and no debt. It pays out all of its net income as dividends and has a zero growth rate. The current stock price is $27 per share, and it has 5 million shares of stock outstanding. If it moves to a capital structure that has 40% debt and 60% equity (based on market values), its investment bankers believe its weighted average cost of capital would be 10%. What would its stock price be if it changes to the new capital structure?
A. $28 B. $30 C. $33 D. $35 E. $40
Fiori Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its average costs per unit are as follows: Average Cost per UnitDirect materials$6.05 Direct labor$3.05 Variable manufacturing overhead$1.70 Fixed manufacturing overhead$3.00 Fixed selling expense$0.50 Fixed administrative expense$0.40 Sales commissions$1.00 Variable administrative expense$0.50 The incremental manufacturing cost that the company will incur if it increases production from 5,000 to 5,001 units is closest to:
A. $10.80 B. $13.80 C. $14.30 D. $16.20