1. What is the source of Purinex’s value?
low manufacturing cost
patents
market share
unique talent pool
book value
2. If a firm increases the percentage of debt in versus equity in their capital structure, which of the following is most likely to be true about the risks to firm's investors?
a. Risk to debt holders decreases and risk to equity holders increases.
b. Risk to debt holders increases and risk to equity holders decreases.
c. Risk to debt holders increases and risk to equity holders increases.
3. Which of the following is not a difference between budgeting in states as opposed to budgeting in the federal government?
Many states prepared biennial budgets and the federal government prepares an annual budget.
Many states pass a single appropriation / budget law and the federal government normally passes more than ten such bills (or at least is expected to).
Many states require a balanced budget each year and the federal government does not.
Most states provide pensions for their career employees and the federal government only requires that its employees participate in Social Security.