Using the balance sheet model of the firm, corporate finance may be thought of as the analysis of three primary subject areas. What are these areas: - Answer-capital budgeting, capital structure, net working capital
capital structure - Answer-the mix of long-term debt and equity of a firm
Whi...
FIN 301 Midterm Exam Questions with
Latest Update
Using the balance sheet model of the firm, corporate finance may be thought of as the
analysis of three primary subject areas. What are these areas: - Answer-capital
budgeting, capital structure, net working capital
capital structure - Answer-the mix of long-term debt and equity of a firm
Which of the following should be the main goal of the financial manager of a
corporation? - Answer-to maximize current market value per share of company stock
Secondary market - Answer-the market for the exchange of securities that have already
been issued by a firm
The ___ of a corporation include the corporation's name, its intended life, its business
purpose, and the number of shares that can be issued. - Answer-Articles of
Incorporation
Limited liability is never a characteristic of which form(s) of an organization? - Answer-
Sole proprietorship
Operating Cash Flow - Answer-Earnings before Interest and Taxes + Depreciation
Expense - Taxes
Net Capital Spending - Answer-Ending Net Fixed Assets - Beginning Net Fixed Assets +
Depreciation Expense
Change in Net Working Capital (NWC) - Answer-Ending Networking Capital - Beginning
NWC
Cash Flow From Assets - Answer-Operating Cash flow - Net capital spending - change
in NWC
Which of the following statements does not accurately describe the relationship
between book value and market value? - Answer-market value always exceeds book
value
The ___ tax bracket is the extra tax that would be paid if one more dollar were earned
and the ___ tax bracket is the tax bill divided by net income. - Answer-marginal,
average
Current Ratio - Answer-Current Assets / Current Liabilities
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