BUSI 408 Midterm Exam.
The management of a firm's short-term assets and liabilities - CORRECT ANSWER Working capital management
The process of planning and managing a firm's long-term investments - CORRECT ANSWER Capital budgeting
The mixture of debt and equity used by a firm to finance ...
The management of a firm's short-term assets and liabilities - CORRECT ANSWER Working capital
management
The process of planning and managing a firm's long-term investments - CORRECT ANSWER Capital
budgeting
The mixture of debt and equity used by a firm to finance its operations - CORRECT ANSWER Capital
structure
The primary goal of financial management - CORRECT ANSWER To maximize the current value per share
of the existing stock
A capital budgeting decision could be... - CORRECT ANSWER Deciding whether or not to open a new
store
Working capital management includes decisions concerning what? - CORRECT ANSWER Accounts
payable, Accounts Receivable, Inventory. NOT long term debt
This is concerned with the upper portion of the balance - CORRECT ANSWER Working capital
management
Financial managers should strive to maximize the current value per share of the existing stock because..
- CORRECT ANSWER Because the current stockholders are the owners of the corporation
The decisions made by financial managers should all be ones which increase the.. - CORRECT ANSWER
market value of the existing owners' equity
, Accounting profits and cash flows are... - CORRECT ANSWER ...generally not the same since GAAP allows
for revenue recognition separate from the receipt of cash flows
The financial statement showing a firm's accounting value on a particular date is the... - CORRECT
ANSWER balance sheet
Net working capital is defined as: - CORRECT ANSWER Current Assets—Current Liabilities
A _______ asset is one which can be quickly converted into cash without significant loss in value -
CORRECT ANSWER Liquid
The financial statement summarizing a firm's accounting performance over a period of time is the: -
CORRECT ANSWER Income Statement
Noncash items refer to: - CORRECT ANSWER expenses charged against revenues that do not directly
affect cash flow
_______ refers to the cash flow that results from the firm's ongoing, normal business activities -
CORRECT ANSWER Cash flow from operating activities
______ refers to the changes in net capital assets - CORRECT ANSWER Cash flow from investing
_______ refers to the difference between a firm's current assets and its current liabilities - CORRECT
ANSWER Net working capital
______ is calculated by adding back noncash expenses to net income and adjusting for changes in
current assets and liabilities - CORRECT ANSWER Cash flow from operations
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