Finance Questions
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Equipment will be purchased in January for $10,000 cash
theory: companies with HIGH Fixed costs relative to variable costs will have ___________ operating leverage
Accumulates only VARIABLE PRODUCT COSTS with inventoryAssigns..DM USEDDLVARIABLE OH
when a company's sales revenue is increasing, high operating leverage is good because it means that profits will
what is the first budget to create in a master budget?
Accumulates all product costs with inventoryAssigns...DM USEDDLVARIABLE OVERHEADFIXED OVERHEAD
What causes the differences in Operating Income between the two methods?
T/F Companies with high fixed costs relative to variable costs will have high operating leverage
the process of determining the actions needed to achieve the desired level of profits
_____ are used for both planning and controlling
when sales are declining, too much operating leverage will cause profits to
True or False. The expected return on an investment with a beta of 2.0 is twice as high as the expected return on the market.
What is the relationship between variable costs ratio and contribution margin ratio?
True or false. Investors demand higher expected rates of return from stocks with returns that are highly exposed to macroeconomic risks
True or false. Investors demand higher expected rates of return from stocks with returns that are very sensitive to fluctuations in the stock market.
Suppose a firm uses its company cost of capital to evaluate all projects. Will it underestimate or overestimate the value of high-risk projects.
Which project is likely to have a higher asset beta. Sales force for project A is paid a fixed annual salary or Project B's sales force is paid by commissions only
Manager of actively managed funds are investment professional who typically beat the market.
True or False. The CAPM implies that if you could find an investment with a negative beta, its expected return would be less than the interest rate.
True or false. A well-diversified portfolio with a beta of 2.0 is twice as risky as the market portfolio.