QUIZ M04
Which of the following is most closely associated with expenses?
Product (value propositions) design(s)
If Westfield Corporation wanted to reduce its terms of payment from 60 days to 30 days for its
customers, which from the following list would most likely occur?
Its average price received would decrease.
As part of the planning process for Westfield’s next operating year, which from the following
list would you generally do first?
Develop a marketing plan.
(Develop your target market, then you can sales forecast)
Company managers are considering selling more stock to raise $500,000 of new equity to
purchase $500,000 of new manufacturing equipment. What would the new weighted average
cost of capital be if this plan were implemented?
10.1% or 10%
QUIZ M05
If Westfield wanted to expand its production capacity by adding an addition and equipment
to its current plant at a cost of $1,000,000 and it also wanted to lower its weighted average
cost of capital, how would it want to finance the plant expansion?
With debt
During planning for the upcoming year, Westfield management must ensure that the
company stays within the loan covenants set by its lender. From the following, which is an
example of one of the loan covenants for year 9?
Minimum current ratio of 3