Question

1. true or False: Chemical manufacturer DuPont has approximately $0.94 in assets for every dollar in sales. According to asset intensity for every $100 increase in sales, the firm would need about $94 of additional assets.

2. True or False: When venture capitalists invest in a start-up business, they contribute debt capital.

3. True or False: Treasury bills are short-term securities issued by the United States government.

4. True or False: Both debt and equity capital have set maturities.

5. True or False: Risk is defined as the uncertainty of a profit or a loss.

6. True or False: The major purpose of cash is to pay day-to-day expenses.

7. True or False: Virtually all financial decisions involve a tradeoff between risk and return.

8. True or False: Hedge funds account for about 10% of all stock exchange activity.

9. True or False: Investments that promise the highest returns tend to involve the most risk.

10. True or False: Financial managers are responsible for increasing profits to shareholders.

Answer 1

As per rules I am answering the first 4 subparts of the question

1: True: capital intensity measures the amount of assets needed for every dollar of sales. Since the capital intensity is 0.94, it implies that the company needs 0.94 worth of assets for every dollar of sales. Hence for every $100 of sales the company will need $94.00 of assets.

2: False: venture capitalists contribute to a new start up business in the form of equity.

3: True: treasury bills are short-term securities which come with a maturity of 4,13,26 and 52 weeks.

4: False: While debt has a fixed maturity equity does not have a fix maturity. Equity represents ownership in the business and hence it remains as long as the business is running.