The Following Information Was Included in a Note to the 2015

question 129

Multiple Choice

The following information was included in a note to the 2015 financial statements of Romeo Productions: The company has a loan agreement with First National Bank that states:
1. The current ratio must be $2.0$ or higher at all times.
2. The debt-to-equity ratio must not exceed $0.7$ at any time.
3. The times interest earned ratio must be $5.0$ or higher.
4. The inventory turnover ratio must be $4.0$ or higher. The company's ratios are: current ratio,2.3;debt-to-equity ratio,0.6;times interest earned ratio,7.1;and inventory turnover ratio,3.7.Based on this information,the company was in default of its loan agreement because of the

• A)current ratio
• B)debt-to-equity ratio
• C)times interest earned ratio
• D)inventory turnover ratio

Understand the concept of consumer equilibrium and how it can be achieved.

Understand different international business strategies (e.g., licensing, strategic alliance, exporting) and their characteristics.

Recognize various staffing models used by international businesses (e.g., ethnocentric, polycentric, geocentric, regiocentric) and their application.

Identify the impact of cultural dimensions on organizational behavior and management in an international context.

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Definitions:

Sale of Receivables with Recourse

A financial transaction where a company sells its receivables to another party but remains liable if the party owing the receivables fails to pay.

Required Disclosure

Information that entities are legally mandated to provide to stakeholders, regulators, or the public within financial statements or reports.

Scheduled Interest

The amount of interest payments that are planned and detailed according to the terms of a loan over a certain period.

Repayment Schedule

A repayment schedule outlines the terms for paying back a loan or debt, specifying the amounts due at each payment interval, the number of payments, and the interest rate applied.