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Anton [14]
3 years ago
8

Mezzanine lenders will occasionally include features like "PIK Toggle"s, which allow the borrower to "pay" its interest by rolli

ng it into the loan balance. Thus, if the company can't make an interest payment as normally scheduled, it can defer some or all of the interest for a period of time. This is one of the reasons why borrowers like mezzanine debt. True or false?
Business
1 answer:
TiliK225 [7]3 years ago
7 0

Answer:

True

Explanation:

Under PIK loan, the borrower doesn't have to make cash interest payment instead, the interest accrues to the amount of the principal loan which continues to increase over time.

A PIK "toggle" allows the company to choose whether to pay the interest in cash or have it accrue to the principal.

You might be interested in
Which of the following statements supports multiple sourcing:
Makovka662 [10]

Answer:

Concerns exist about supplier capacity for future volume.

Explanation:

The multisourcing is a method in which the supplier base is expanded increasing the actual number of suppliers, because the needs of the company are increasing.

Advantages:

-Alternative sources of materials in case of delivery stoppage by a supplier.

-Reduced probability of bottlenecks due to insufficient production capacity to meet peak demand.

- Increased competition mong suppliers leads to better quality, price, delivery, product innovation and buyer´s negociation power.

-More flexibility to reat to unexpected events that could endanger supplier´s capacity.

Disadvantages:

-Reduced efforts by supplier to match buyer´s requirements.

-Higher cost for the purchasing organization (greater number of orders, telephone calls, records, and so on).

3 0
3 years ago
Colby Corporation has provided the following information: Operating revenues from customers were $207,700. Operating expenses fo
wel

Answer:

$46,700

Explanation:

Operating revenue

$207,700

Less:

Operating expenses

($119,000)

Operating profit

$88,700

Less:

Interest expense

($8,700)

Income tax expense

($37,000)

Net income

$43,000

Add:

Gain from sale

$3,700

Total net income

$46,700

Therefore, Colby's net income is $46,700

6 0
2 years ago
Subway restaurants are positioned as offering healthy, good-tasting sandwiches. When the competitive frame of reference is quick
Vladimir79 [104]

Answer:

health

Explanation:

Subway's points of difference (POD) when it is compared to McDonald's is health (or healthy food). When Subway is compared to other health food restaurants it's POD is taste. Subway focuses on selling healthy food that tastes well.

POD is what makes your business different form other similar businesses. A restaurant market is a monopolistic competition, where every supplier offers a different product than its competitors, and only those that excel at differentiating themselves in a good way will grow and expand.

4 0
3 years ago
As a group, oligopolists earn the highest profit when they a. achieve a Nash equilibrium. b. produce a total quantity of output
Hunter-Best [27]

Answer: The correct answer is "c. produce a total quantity of output that falls short of the Nash-equilibrium total quantity."

Explanation:  When oligopolists act together, it is called collusion. Collusion refers to cooperation between different companies. Companies collude in some way to establish prices and production levels. In this way, they can act as monopolists and establish a high price and a level of production that does not reach the total amount of Nash equilibrium which produces the maximum benefit as a group.

8 0
3 years ago
Edward is in the process of purchasing a car. The list price of the car is $41500. If Edward pays cash for the car, the dealer w
SpyIntel [72]

Answer: Effective interest rate = 1.36% = 1% rounded of to the nearest percent

Explanation:

Total amount payable = 8880 x 5 = $44400

Price = 41500

FV = P(1 + r)^n

44400 = 41500(1 + r)^5

(1 + r)^5 =44400/41250

\sqrt[5]{(1 + r)^5} = \sqrt[5]{1.0698795181}

1 + r = 1.0136008701

r =  1.0136008701 - 1 = 0.0136008701

Effective interest rate = 1.36% = 1% rounded of to the nearest percent

8 0
3 years ago
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