Which of following is a reason for a high-dividend-payout policy?
A) Dividends are generally taxed at a lower rate than capital gains.
B) All investors prefer high dividend payments over low dividend payments.
C) Cash payments today are preferred over uncertain payments in the future.
D) More cash is left in the company for investing in company projects.
Answer: C
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A company that makes the rocket widget has one machine capable of producing this unique item
The machine requires an attendant, who works 40 hours a week for $12 per hour and has made himself available for a maximum of 8 hours of overtime. It costs $20 per hour to run the machine and it is capable of producing 10,000 rocket widgets per hour. The widgets sell for $10 per hundred and cost $1 per hundred in materials. If the production manager wishes to develop a sales and operations plans using an optimization model, which of the following statements is valid? A) A constraint should limit overtime to less than 8 hours per week. B) The objective function should maximize the amount of rocket widgets produced. C) The objective function must be to minimize the overtime. D) A constraint should limit the cost to run the machine to less than or equal to $20 per hour.
Holding everything else constant, an increase in cash ________ a firm's net debt
A) will decrease B) will have no impact on C) will increase D) may increase or decrease