FIN 300 (Principles of Finance for the Private Sector)

Question 1 The rate of interest actually paid or earned, also called the annual percentage rate (APR), is the interest rate. effective Question 2 Combining two assets having perfectly negatively correlated returns will result in the creation of a portfolio with an overall risk that decreases to a level below that of either asset.

Question 1 The statement of cash flows provides a summary of the firm's all of the above. Question 2 A firm has prepared the coming year's pro forma balance sheet resulting in a plug figure in a preliminary statement called "the external financing required "of negative $250,000. The firm may prepare to invest in marketable securities totaling $250,000.

Question 1 The of a business firm is measured by its ability to satisfy its short-term obligations as they come due. 1. liquidity Question 2 is where the firm’s ratio values are compared to those of a key competitor or group of competitors, primarily to identify areas for improvement. 1. Benchmarking

The tax rate depends on the level of taxable income. a. true

Question 1 The problem with a constant-payout-ratio dividend policy from the shareholder's perspective is that if the firm's earnings drop, so does the dividend payment. Question 2 The factors involved in setting a dividend policy include all of the following EXCEPT Operating constraints. Question 3 Stock dividends are costly to issue than cash dividends. more

Question 1 A firm has issued preferred stock at its $125 per share par value. The stock will pay a $15 annual dividend. The cost of issuing and selling the stock was $4 per share. The cost of the preferred stock is 12.4 percent. Question 2 In order to recognize the interrelationship between financing and investments, the firm should use when evaluating an investment. the weighted average cost of all financing sources Question 3 The approximate before-tax cost of de...

Question 1 Initial cash flows and subsequent operating cash flows for a project are sometimes referred to as relevant cash flows. Question 2 One basic technique used to evaluate after-tax operating cash flows is to add noncash charges to net income. Question 3 Unsophisticated capital budgeting techniques do not explicitly consider the time value of money.

Question 1 The rate of interest actually paid or earned, also called the annual percentage rate (APR), is the interest rate. effective Question 2 Combining two assets having perfectly negatively correlated returns will result in the creation of a portfolio with an overall risk that decreases to a level below that of either asset. Question 3 Xiao Li wishes to accumulate $50,000 by the end of 10 years by making equal annual end-of- year deposits over the next 10...

Question 1 The statement of cash flows provides a summary of the firm's all of the above. Question 2 A firm has prepared the coming year's pro forma balance sheet resulting in a plug figure in a preliminary statement called "the external financing required "of negative $250,000. The firm may prepare to invest in marketable securities totaling $250,000. Question 3 A corporation sold a fixed asset for $100,000. This is an investment cash flow and a source of f...

Question 1 The of a business firm is measured by its ability to satisfy its short-term obligations as they come due. 1. liquidity Question 2 is where the firm’s ratio values are compared to those of a key competitor or group of competitors, primarily to identify areas for improvement. 1. Benchmarking Question 3 ABC, Inc. extends credit terms of 45 days to its customers. Its credit collection would likely be considered poor if its average collection period wa...