43) Stated Maturity Is ______. A. Usually a Fixed Rate, but It Can Be a Variable Rate That

43) Stated maturity is ______. A. usually a fixed rate, but it can be a variable rate that’s adjusted according to a specified formula B. the date the borrower must repay the money it borrowed C. the amount the borrower must repay

44) Conditional sales contracts ______. A. are seldom issued to finance the purchase of aircraft B. are similar to equipment trust certificates C. enable the borrower to obtain title to the assets only before it fully repays the debt D. all of these

45) The Time Value of Money Principle says ______. A. to set a price and other terms that investors will find acceptable when issuing securities B. to use discounted cash flow analysis to compare the costs and benefits of financing decisions, such as alternative securities to sell, lease versus borrow and buy, and bond refunding C. to look for the most advantageous ways to finance the firm, such as the lowest-cost debt alternative D. that announcing the firm's decision to issue securities conveys information about the firm

46) ______says to look for opportunities to develop asset-based financing arrangements that offer new positive-NPV financing mechanisms. A. The Principle of Self-Interested Behavior B. The Time Value of Money Principle C. The Principle of Valuable Ideas D. The Principle of Comparative Advantage

47) The Principle of Self-Interested Behavior says ______. A. to use discounted cash flow analysis to compare the costs and benefits of leasing, relative to the alternative of borrowing and buying. B. to look for profitable opportunities to lease (or rent) an asset, rather than borrow and buy it. C. to calculate the net advantage of leasing based on the incremental after-tax benefits that leasing will provide. D. that leasing transfers the tax benefits of ownership from the lessee to the lessor.

48) ______says to transfer the tax benefits of ownership to other parties if they are willing to pay for benefits your firm cannot use. A. The Principle of Comparative Advantage B. The Capital Market Efficiency Principle C. The Principle of Incremental Benefits D. The Principle of Two-Sided Transactions

49) The wholesale price for Captain John’s is $0.612 per loaf, and the variable cost of production is $0.387 per loaf. Captain John’s is expecting that expansion will allow them to sell an additional 4.5 million loaves in the next five years. What additional revenues minus expenses will be generated from expansion? A. $1,012,500 B. $1,102,000 C. $912,500 D. $1,000,500

50) The wholesale price for Captain John’s is $1.00 per loaf, and the variable cost of production is $0.50 per loaf. Captain John’s is expecting that expansion will allow them to sell an additional 5.0 million loaves in the next year. What additional revenues minus expenses will be generated from expansion? A. $25,000 B. $250,000 C. $550,000 D. none of these

51) The wholesale price for Captain John’s is $3.00 per loaf. One million loaves will be sold in the next year. What is the contribution margin? A. $3,000,000 B. cannot tell C. $3.00 D. $3,000,000 minus fixed costs

We need the variable cost to determine the contribution margin which is equal to the wholesale price minus the variable cost; thus, we cannot tell

52) Which of the following statements is true? A. Soft capital rationing refers to the rationing imposed externally by limited funds for borrowing from outside sources. B. Hard capital rationing refers to the rationing imposed internally by the firm. C. A post audit is a set of procedures for evaluating a capital budgeting decision after the fact. D. all of these

53) In efficient markets, as in the United States, you should think long and hard before you conclude that a market price is ______. A. wrong. B. fair. C. followed by many analysts. D. all of these

54) Pursuing valuable ideas is the best way ______. A. to restrain your spending. B. to avoid risk. C. to achieve extraordinary returns. D. to get yourself in trouble.

55) ______says to use both bottom-up and top-down processes to increase the chance of uncovering valuable ideas. A. The Principle of Two-Sided Transactions B. The Principle of Valuable Ideas C. The Behavioral Principle D. The Principle of Comparative Advantage

56) ______says to carefully evaluate and monitor the financial plan’s impact on the firm and its stakeholders. A. The Principle of Capital Market Efficiency B. The Principle of Self-Interested Behavior C. The Principle of Risk-Return Trade-Off D. The Principle of Diversification

57) ______says to forecast the firm’s cash flows, and analyze the incremental cash flows of alternative decisions. A. The Principle of Incremental Benefits B. The Time Value of Money Principle C. The Signaling Principle D. The Principle of Risk-Return Trade-Off