Chapter 4 ~ ApproachNews

Sunday, April 11, 2021

Chapter 4

April 11, 2021 / by NewsGeek / with No comments /

an increase in the day's inventory help period will have what effect on the net present value Nov of working capital.. Most projects require additional investments in working capital, such as increased inventories and accounts receivable, that are typically recovered at a later date.All else constant, which one of the following will increase a firm's cost of equity if the firm computes that cost using the security market line approach? The aftertax cost of debt generally increases when: I. a firm's bond rating increases II. the market rate of interest increases III. tax rates decrease...All else constant, an increase in a firm's cost of debt Which one of the following represents the minimum rate of return a firm must earn on its assets if it is to maintain the current value of its securities?Insuring effective use of firm assets, while minimizing risk and generating returns for owners are all charges to the financial manager. 1. All else constant, an increase in a firm's cost of debt will: Answer result in an increase in the firm's cost of capital.. lower the firm's weighted average of...a)could be caused by an increase in the firm's tax rate. b)will result in an increase in the firm's cost of capital.

Chapter 14 Flashcards by Pochie Bash | Brainscape

Everything else held constant, an increase in interest rates on student loans. Answer: A stock represents a share of ownership of a corporation, or a claim on a firm's earnings/assets. Stocks are part of wealth, and changes in their value affect people's willingness to spend.Assumptions of constant return invalid in real world. As some one else explained, even under this assumptions number of companies will decrease A constant-cost industry occurs because the entry of new firms, prompted by an increase in demand, does not affect the long-run average cost curve of...Such firms need to balance the economies of scale against the diseconomies of scale. For instance, a firm might be able to implement certain economies of Law of SupplyLaw of SupplyThe law of supply is a basic principle in economics that asserts that, assuming all else being constant, an increase in...a. increasing the dollar amount of each sale. b. increasing traffic flow within the firm's stores. c. transforming fixed costs into variable costs. c. could have remained constant if the amount of the decrease in current assets equaled the amount of the increase in current liabilities.

Finance chap. 12 (test 4) Flashcards | Quizlet

If the output of a firm increases more than in proportion to an equal percentage increase in all inputs, the production is said to exhibit For example, if a firm doubles inputs, it doubles output. In case, it triples output. The constant scale of production has no effect on average cost per unit produced.Whenever a perfectly competitive firm chooses to change its level of output, holding the price of the product constant, its marginal revenue. d. There is insufficient data to determine the firms profit. Term. if there is an increase in market demand in a perfectly competitive market, then in the short run.Study of whether efficiency increases with increase in all factors of production is important for both Constant returns to scale mean that total product changes proportionately with increase in all inputs. Industries that exhibit increasing returns to scale typically have small number of large firms.Constant Returns to Scale: When our inputs are increased by m, our output increases by exactly m. Now let's look at a few production functions and see if we have increasing, decreasing, or constant returns to scale. Some textbooks use Q for quantity in the production function, and others...Intuitively, an increase in productivity hold-ing all else constant leads to higher revenues without changing costs. Since profits are revenues minus costs, the smaller the profit margin, the higher All else equal, diversified firms should experience a percent diversification premium in the stock market.

may well be led to by means of an increase in the company's tax charge.

will end result in an increase in the company's cost of capital.

will decrease the company's weighted reasonable cost of capital.

will decrease the company's cost of equity.

will increase the firm's capital construction weight of debt.