MGMT 200 Exam 3 with correct answers

MGMT 200 Exam 3 with correct answers |\ |\ |\ |\ |\ |\




Which of the following is not an advantage of debt
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financing?
a. The ownership interest of current stockholders is
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unchanged |\




b. Interest is tax deductible
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c. Debt financing often has no maturity date
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d. The cost of borrowing may be lower than the return on
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equity - CORRECT ANSWERS ✔✔Debt financing often has
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no maturity date
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Which of the following is not a primary source of long-
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term debt financing?
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a. Bonds
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b. Leases
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c. Accounts Payable
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d. Notes Payable - CORRECT ANSWERS ✔✔Accounts
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Payable


A company's capital structure refers to:
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a. Its mixture of paid-in capital versus retained earnings
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b. Its mixture of current versus long-term assets
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, c. Its mixture of liabilities and stockholders' equity
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d. Its mixture of current versus long-term liabilities -
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CORRECT ANSWERS ✔✔Its mixture of liabilities and
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stockholders' equity |\




In each succeeding payment on an installment note:
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a. The amount that goes to interest expense decreases
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b. The amounts paid for both interest and principal
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increase proportionately |\




c. The amount that goes to interest expense is unchanged
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d. The amount that goes to interest expense increases -
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CORRECT ANSWERS ✔✔The amount that goes to interest
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expense decreases |\




Airline Accessories obtains a $100,000, three year loan, at
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6% interest, with monthly payments of $3,042. What
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amount would be recorded for interest expense for the
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first full month?
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a. 3,042
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b. 2,542
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c. 500
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d. 6,000 - CORRECT ANSWERS ✔✔500
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