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Test Bank for Fundamentals of Corporate Finance Midterm Review 6th edition by Jonathan Berk
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Test Bank for Fundamentals of Corporate Finance Midterm Review 6th edition by Jonathan Berk
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Test Bank for Fundamentals ofCorporate Finance Midterm Review 6th
edition by Jonathan Berk
working capital management - ANShow will we manage the day-to-day financial activities?
capital structuring - ANShow will this investment be financed?
capital structure - ANSthe mixture of debt and equity maintained by a firm
capital budgeting - ANSwhat long term investments should the firm make?
capital budgeting - ANSthe process of planning and managing a firm's long-term investments.
net working capital - ANScurrent assets - current liabilities
what is the term for the money you have for daily operating? - ANSnet working capital
depreciation - ANS_________ does not affect cash flow.
agency problem - ANSthe possibility of conflict of interest between the owners and management
of the firm
would there be an agency problem in a sole proprietorship? - ANSno, because the agent is the
principal
noncash expenses - ANSexpenses charged against revenues that do not directly affect cash
flow, such as depreciation.
generally accepted accounting principles [G A A P] - ANSthe common set of standards and
procedures by which audited financial statements are prepared.
OCF (operating cash flow) equation - ANSearnings before interest and taxes (EBIT) +
depreciation - taxes
operating cash flow [OCF] - ANScash generated from a firm's normal business activities
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