Exam (elaborations)
FINC 300 Midterm Exam Questions And Answers Latest Update
- Course
- FINC 300
- Institution
- American Military University
FINC 300 Midterm Exam Questions And Answers Latest Update
[Show more]
Content preview
Solution 2024/2025Pepper
FINC 300 Midterm Exam Questions And
Answers Latest Update
financial management ANS✔✔ maintenance and creation of economic value
or wealth by focusing on decision making with eye toward creating wealth
fundamental goal of business ANS✔✔ create value for shareholders by
maximization of shareholder wealth
shareholders ANS✔✔ legal owners of the firm
5 principles that form the foundations of finance ANS✔✔ 1) cash flow is
what matters
2) money has a time value
3) risk requires a reward
4) market prices are generally right
5) conflicts of interest cause agency problems
cash flow is what matters ANS✔✔ -represents money that can be spent
-determine value of business
-incremental cash flow
money has a time value ANS✔✔ opportunity cost
, Solution 2024/2025
Pepper
opportunity cost ANS✔✔ cost of making a choice in terms of the next best
alternative that must be foregone
risk requires a reward ANS✔✔ return must satisfy 2 requirements:
1) a return for delaying consumption
2) an additional return for taking on a risk
market prices are generally right ANS✔✔ efficient market
conflicts of interests cause agency problems ANS✔✔ -what is best for
managers vs what is best for stockholders
-agency problem
agency problem ANS✔✔ problems and conflicts resulting from the
separation of the management and ownership of the firm
-root of the problem is conflict of interests
finance ANS✔✔ the study of how people and businesses evaluate
investments and raise capital to fund them
3 issues finance addresses ANS✔✔ 1) capital budgeting
2) capital structure decisions
3) working capital management
working capital management ANS✔✔ management of firms current assets
and short term financing
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Schoolflix. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
53340 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now