A firm that follows an aggressive current asset financing approach uses primarily short-term credit and thus is more exposed to an unexpected increase in interest rates than is a firm that uses long-term capital and thus follows a conservative financing policy. a) true
b) false

The market yield on spice grills' bonds is 15%, and the firm's marginal tax rate is 33%. what is their shareholders' required return if the equity risk premium is 4%?

Adrawback of short-term contracting as an alternative to making a component in-house is thata. it is the most-integrated alternative to performing an activity so the principal company has no control over the agent. b. the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality. c. it fails to allow a long planning period that individual market transactions provide. d. the buying firm cannot demand lower prices due to the lack of a competitive bidding process.

What type of negotiating strategy requires the supplier to open its books to the purchasers? a. competitive biddingb. cost-based price modelc. price-based modeld. market-based price modele. transparent negotiations