Midterm sample - Econ 135 Corporate Finance Sample Midterm...

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Econ 135: Corporate Finance Sample Midterm For the numerical problems, you have to show your calculations as well as your results to receive full credit. Please write down the correct formula and then plug in the appropriate numbers from the question. Multiple Choice Questions (20 points) Please circle your choice. Each question is worth 2 points. 1. A current asset is: A) An item currently owned by the firm. B) An item that the firm expects to own within the next year. C) An item currently owned by the firm that will convert to cash within the next 12 months. D) The amount of cash on hand the firm currently shows on its balance sheet. E) The market value of all the items currently owned by the firm. 2. Ratios that measure the firm's financial leverage are known as: 3. Interest earned on both the initial principal and the interest reinvested from prior periods is called: 4. A loan where the borrower receives money today and repays a single lump sum at some time in the future is called a(n) _____________ loan.
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