Business Finance 3

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1. The option for a firm to expand future production has value because:

  • Today's production costs are lower than in the future
  • The option requires no investment today
  • The future holds uncertainty
  • Future production will be profitable
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Other questions in this quiz

2. A proxy contest is typically one in which:

  • Board attempts to gain control from the Directors
  • Board attempts to gain control from the shareholders
  • Outsiders attempt to gain control from management
  • Management attempts to gain control from the Directors

3. System of electing a board of directors where each director is voted on separately is known as:

  • Superma
  • Majority voting
  • Cumulative voting

4. A warrant grants its holder the right to do which one of these prior to a specified date?

  • Convert debt into a specified number of shares
  • Sell common shares at a predetermined price
  • Purchase shares at a predetermined price
  • Exchange stock for bonds at a specified price

5. Accounting break-even level of sales is where:

  • Variable costs are covered
  • Fixed costs, variable costs, and depreciation are covered
  • Fixed costs are covered
  • Fixed and variable costs are covered

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