Archives
Chapter 1 important disciplines on which financial management relies area
Chapter 1—THE ROLE AND OBJECTIVE OF FINANCIAL MANAGEMENT MULTIPLE CHOICE 1. The primary objective of the firm is: a. Shareholder wealth maximization b. Social responsibility c. Long run survival d. Profit maximization 2. The limitations of the profit maximization goal […]
Chapter 10 There is neither a gain or a loss on the sale of a depreciable
Chapter 10—CAPITAL BUDGETING AND CASH FLOW ANALYSIS MULTIPLE CHOICE 1. The value of resources used in an investment project should be measured in terms of their a. acquisition cost b. historical cost c. opportunity cost d. depreciated cost 2. Sale […]
Chapter 11 When a project has multiple internal rates of
Chapter 11—CAPITAL BUDGETING DECISION CRITERIA AND RISK ANALYSIS MULTIPLE CHOICE 1. Multiple internal rates of return can occur when there is (are): a. large abandonment costs at the end of a project’s life b. a major shutdown and rebuilding of […]
Chapter 12 The cost of capital isa. the rate of return required by investors
Chapter 12—THE COST OF CAPITAL MULTIPLE CHOICE 1. For a company that is not planning to change its target capital structure, the proportions of debt and equity used in calculating the weighted cost of capital should be based on the […]
Chapter 13 When fixed operating costs are incurred by the firm
Chapter 13—CAPITAL STRUCTURE POLICY: FOUNDATION CONCEPTS MULTIPLE CHOICE 1. Raw material and direct labor costs are examples of a. fixed costs b. overhead costs c. variable costs d. capital costs 2. When fixed operating costs are incurred by the firm, […]
Chapter 14 The Modigliani-Miller theory that the value of the firm is independent
Chapter 14—CAPITAL STRUCTURE POLICY: THEORY AND PRACTICE MULTIPLE CHOICE 1. In analyzing the value of the firm as a function of capital structure, the present value of the tax shield benefit is offset by the present value of the expected […]
Chapter 15 Dividend reinvestment plans involve the purchase of
Chapter 15—DIVIDEND POLICY MULTIPLE CHOICE 1. The dividend “clientele effect” concept was originally developed by a. Myron Gordon b. Merton Miller and Franco Modigliani c. Milton Friedman d. Paul Samuelson 2. Dividend reinvestment plans involve the purchase of ANS: B […]
Chapter 16 Determine Warrens Pretax Earnings The Funds Released
d. rate of interest on borrowed funds 95. Renfro Industries balance sheet for December 31, 20×3 is as follows: Assets ($000) Liabilities and Equity ($000) Cash $ 8,000 Accounts Payable $ 36,000 Marketable Securities 4,000 Notes Payable 12,000 Accounts Receivable […]
Chapter 16 The Cost Funds Invested Inventories Measured
Chapter 16—WORKING CAPITAL POLICY AND MANAGEMENT OF CURRENT ASSETS MULTIPLE CHOICE 1. The length of the operating cycle is equal to the length of the a. inventory conversion period b. receivables conversion period c. cash conversion period d. inventory conversion […]
Chapter 17 Which of the following factors influence the interest
Chapter 17—MANAGEMENT OF CURRENT LIABILITIES MULTIPLE CHOICE 1. Which of the following factors influence the interest cost of a loan? a. the size of the loan b. existence of compensating balances c. loan discounting d. All of these answers are […]
Chapter 18 Motorola has a contract to deliver cellular telephones in Japan
Chapter 18—INTERNATIONAL FINANCIAL MANAGEMENT MULTIPLE CHOICE 1. Which of the following actions would not tend to increase the value of a country’s currency? a. relatively low interest rates b. government trade policies that limit imports c. relatively low rate of […]
Chapter 2 Securities not listed on exchanges are said to be traded a
Chapter 2—THE BUSINESS ENVIRONMENT MULTIPLE CHOICE 1. Financial intermediaries include a. securities brokers b. securities dealers c. investment bankers d. none of the above 2. The following are listed security exchanges in the United Sates: ANS: D PTS: 1 OBJ: […]
Chapter 3 Which of the following are not part of “current assets?”
Chapter 3—REVIEW OF FINANCIAL STATEMENTS MULTIPLE CHOICE 1. Major components of a firm’s balance sheet include: a. Sales b. Cost of goods sold c. Current assets d. a and b 2. Which of the following are not part of “current […]
Chapter 4 The appropriate standard for comparison of financial ratios probably
Chapter 4—EVALUATION OF FIRM PERFORMANCE MULTIPLE CHOICE 1. Which of the following financial ratios are market-based ratios? a. debt-to-equity b. price-to-earnings c. return on investment d. all of the above 2. The appropriate standard for comparison of financial ratios probably […]
Chapter 5 all of the following balance sheet and income statement items
Chapter 5—LONG-TERM AND SHORT-TERM PLANNING MULTIPLE CHOICE 1. An anticipated need for short-term borrowed funds is best shown in a. an operating budget b. a capital budget c. a production budget d. a cash budget 2. In the percent-of-sales forecasting […]
Chapter 6 Finding the discounted current value of $1,000 to be received
Chapter 6—THE TIME VALUE OF MONEY MULTIPLE CHOICE 1. Other names for the interest rate include all of the following except: a. inflation rate b. opportunity rate c. discount rate d. required rate of return 2. The present value of […]
Chapter 6 You Are now Years Old How Much Must
b. $3,100 c. $2,706 d. $1,100 63. Sales for Triad Inc. have grown from $2 million to $8.092 million in 10 years. What is the implied growth rate of sales for Triad? a. 24.72% b. 4.05% c. 15.0% d. 12.2% […]
Chapter 7 The Standard Deviation Returns Gamma Percent And
Chapter 7—ANALYSIS OF RISK AND RETURN MULTIPLE CHOICE 1. The ____ is a statistical measure of the mean or average value of the possible outcomes. a. probability distribution b. standard deviation c. expected value d. coefficient of variation 2. The […]
Chapter 8 Markos Risk Class Percent What Will The
Chapter 8—BONDS AND OTHER SOURCES OF DEBT MULTIPLE CHOICE 1. Zero coupon bonds are an example of a. original issue deep discount bonds b. extendible notes c. convertible bonds d. floating rate notes 2. If a firm could sell a […]
Chapter 9 The market value of common stock is primarily based
Chapter 9—COMMON STOCKS AND PREFERRED STOCKS MULTIPLE CHOICE 1. Which of the following is not a characteristic of common stock: a. it has no maturity date b. it is considered a permanent form of long-term financing c. it has claims […]