FIN 320|55 Final Exam Review Questions Success Guaranteed| A +
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Course
FIN 320
Institution
FIN 320
Which bond possess the most degree of interest rate risk? - ️️An unsecured bond with high interest and a long time to maturity.
Which of the following is a source of cash? - ️️Collecting Accounts Receivable
Which of the following is not a type of agency cost? - ️️The cost of financing...
FIN 320|55 Final Exam Review Questions
Which bond possess the most degree of interest rate risk? - ✔ ✔ An unsecured bond with high
interest and a long time to maturity.
Which of the following is a source of cash? - ✔ ✔ Collecting Accounts Receivable
Which of the following is not a type of agency cost? - ✔ ✔ The cost of financing the firm.
Which of the following will increase the length of a firms cash cycle? - ✔ ✔ Accounts Recieveable
period increase & Accounts Payable Turn Over increase
Define Sustainable Growth Rate: - ✔ ✔ The maximum possible growth rate a firm can achieve
without external equity financing while retaining a constant debt-equity ratio.
Define the Agency Problem: - ✔ ✔ Conflict of interests between the oweners and managers of a
firm.
Define the common sized income statement: - ✔ ✔ a standardized statement that presents all items
in a % term. Every line item si a percent of revenue/sales.
If a bonds coupon rate is equal to the YTM, the bond is selling at: - ✔ ✔ par value.
If a bonds coupon rate is more than the YTM, the bond is selling at: - ✔ ✔ a premium.
If the bonds coupon rate is less than the YTM, the bond is selling at: - ✔ ✔ a discount.
If the calculated NPV is negative, the discount rate used is: - ✔ ✔ greater than the IRR.
If the NPV of a project is <0, an IRR calculation would yield: - ✔ ✔ less than the required rate of
return for the firm. (project would be rejected)
If the required rate of return on a bond does not change from year to year: - ✔ ✔ the price of the
discount bond will rise over the same period.
If the US dollar depreciates against the Yen, what will occur? - ✔ ✔ Japanese imports will be more
expensive in the US & American imports will be less expensive in Japan
If the US dollar strengthens against the Japanese Yen, what will occur? - ✔ ✔ Japanese imports will
be less expensive in the United States.
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