7.) The contribution margin on the income statement does NOT factor in which of

ID: 2449223 • Letter: 7

Question

7.) The contribution margin on the income statement does NOT factor in which of the following?

A.) Depreciation

B.) Direct labor costs of products

C.) Direct material costs of products

D.) Both B and C

8.) Why would your company want to reduce its accounts receivable policy?

A.) Reducing their receivables will increase their available cash

B.) Reducing their receivables will slightly increase demand

C.) Reducing their receivables will anger their suppliers

D.) None of the above

9.) Which group of tactics will all reduce your company’s leverage?

A.) Paying off current debt, retiring long term debt, and issuing stock

B.) Paying off current debt, issuing long term debt, & retiring stock

C.) Issuing current debt, issuing long term debt, paying a dividend, & retiring stock

D.) Issuing current debt, retiring long term debt, paying a dividend & issuing stock

(7) The contribution margin on the income statement does not include depriciation.

(8) The company would reduce its account receivable policy beaause it reduces their receivable that will slightly increase demand

(9) The company's leverage would be reduced by issuing current debt, issuing long term debt, paying a dividend and retiring stock.

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