Attempting to increase business financial leverage

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Reference no: EM132249813

1. A breakeven analysis is used to:

determine the amount of sales volume a company needs to start making a profit.

utilize personal, family, or friends' money to start a business.

represent a legal obligation to repay original debt plus interest.

raise money by selling a certain share of the ownership of the business.

purchase supplies or equipment through financing made available by vendors.

2. Which of the following is one of the reasons for attempting to increase a business's financial leverage?

It can have a positive impact on the business's return on equity.

The business has to be grown with one's own money.

The interest on debt has a non-deductible nature.

It may lead to an inability to pay the interest on the debt.

It increases a business's overall risk.3

3. In an article in the Cleveland Plains Dealer, a reporter's story wrote an account of an affair between actress Sandra Bullock and country singer Willie Nelson, neither of who are residents of Ohio. The newspaper is in Ohio, and it is an Ohio corporation. If either the actress or country singer wish to sue the newspaper for libel (seeking damages exceeding $500,000), s/he could sue:

a. in federal district court

b. only in state court

c. only in the state where the plaintiff resides

d. any/all of the above

e. none of the above

4. A classic car auto repair shop is located in Santa Fe, New Mexico. Parts are hard to obtain and must often be ordered from suppliers in other states. The owner of the classic car shop often orders seat upholstery from a supplier in Trenton, New Jersey. The upholstery supplier has no salespeople, but instead depends on regularly sending catalogs to potential buyers. After the classic car shop owner experiences numerous complaints from customers that they have developed rashes and itching from the upholstery, requiring replacement, the owner of the classic car shop wants to sue the upholstery supplier to recover the $100,000 in damages he has suffered from using this product. The classic car auto repair shop owner:

a. can sue only in a New Jersey state court.

b. is permitted to bring a diversity of citizenship lawsuit in federal court

c. can sue only in a New Mexico state court, but then only if there are adequate minimum contacts in New Mexico

d. none of the above

Reference no: EM132249813

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