In General When Interest Rates Are Expected to Rise,financial Managers

question 122

Multiple Choice

In general when interest rates are expected to rise,financial managers:

• A) try to lock in long-term financing at low cost.
• B) re-balance the company's debt structure towards more short-term debt.
• C) accept more risk.
• D) rely more on internal sources of funds rather than external sources.

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Definitions:

Manufacturing Overhead

The total of all the indirect costs involved in manufacturing a product, which can include expenses related to equipment maintenance, factory rent, and utilities.

Standard Cost System

An accounting method where costs are predetermined for products and services, facilitating the analysis of variances between expected and actual costs.

Supplies Cost

The expenses associated with purchasing materials and supplies used in the operation of a business, not directly tied to production.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, such as utilities, maintenance, and factory management salaries.