An entity in a 40% tax bracket needs <List A> of operating income to pay 1 of interest and <List B> of pretax income to pay 1 of dividends.

• A.Option A
• B.Option B
• C.Option C
• D.Option D

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If a corporation holds a forward contract for the delivery of government bonds in 6 months and, during those 6 months, interest rates decline, at the end of the 6 months the value of the forward contract will have:

• A.Decreased.
• B.Increased.
• C.Remained constant.
  D Any of the answers may be correct, depending on the extent of the decline in interest
  rates.

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Which of the following statements accurately describes one of the characteristics that distinguishes a multinational company from a domestic company?

• A.A multinational company exports its products to other countries.
• B.A multinational company has stockholders in other countries.
• C.A multinational company operates outside of its country of origin.
• D.A multinational company uses raw materials and components from more than one country.

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What is the total contribution to corporate profits generated by Division A before allocation of central corporate expenses?

• A.US $18,000
• B.US $20,000
• C.US $30,000
• D.US $90,000

Correct Answer: C

Division As total contribution to corporate pr: ruits includes everything except the central corporate expense allocation. Thus, the total contribution is US $31'_1,000 $150,000 sales
* $10,000 other revenue - $30,000 direct materials - $20,000 direct labor- $5,001'_i variable overhead - $25,000 fixed overhead - $15,000 variable S '.A e i n-,e - $35,000 fixed c .-,:{-pease).

C:\Documents and Settings\usernwz1\Desktop\1.PNG A and B, are autonomous divisions of a corporation. They have no beginning or ending
inventories, and the number of units produced is equal to the number of un1Ls sold. Following is financial information relating to the two divisions:

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Which of the following is not a component of physical distribution?

• A.Transportation.
• B.Pricing.
• C.Location of retail outlets.
• D.Warehousing.

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