3. The term permanent current assets implies:

a. The same as fixed assets.

b. Nonmarketable assets.

c. Assets that are usually put in display.

d. Inventory.

4. Which of the following techniques allows explicit consideration of more than one possible outcome?

a. Operating leverage.

b. Present value.

c. Least squares regression.

d. Expected value.

5. Ideally, which of the following types of assets should be financed with long-term financing?

a. Permanent Current Assets and Buildings

b. Fixed assets and temporary current assets.

c. Fixed Assets only

d. Temporary and permanent current assets

6. A firm will usually increase the ratio of short-term debt to long-term debt when:

a. Short-term debt has a lower cost than long-term equity.

b. The term structure is inverted and expected to shift down.

c. The term structure is upward sloping and expected to shift up.

d. The firm is undertaking a large capital budgeting project.

7. During tight money period:

a. Long-term rates are higher than short-term rates.

b. Short-term rates are higher than long-term rates.

c. Short-term rates are equal to long-term rates.

d. The relationship between short and long-term rates remained unchanged.