midw2004ANSWERS

midw2004ANSWERS - McGill University Centre for Continuing...

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McGill University Centre for Continuing Education Winter 2004 MID TERM EXAMINATION Version A _________________________ANSWERS_______________ _________ ______________________ STUDENT NAME STUDENT NUMBER FINANCE I MGCR-341-771 Lecturer: Therese Trainor Date: Time: February 18, 2004 6:00 - 8:00 p.m. INSTRUCTIONS : You are permitted noiseless, non-programmable CALCULATORS . This is a closed book exam - no notes or scrap paper allowed. You may use the opposite side of the exam paper for any rough rough work. This examination is worth 30% of your final mark. This examination consists of 19 questions on 9 pages, 4 pages of tables and 3 pages of formulae. Please ensure that you have a complete examination paper before starting. MARK DISTRIBUT ION Question Marks 1 TO 10 2 marks each = 20 11 to 17 8 marks each = 56 18 12 19 12 Total 100 THIS EXAMINATION PAPER MUST BE RETURNED Page 1 of 11
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Circle only ONE response to each of the following questions. (2 marks each) Answers in bold 1. An example of an indirect agency cost is: a. expenses incurred to monitor management's actions. b. the purchase of an unneeded corporate jet. c. the cost of auditors hired to approve the financial statements. d. the opportunity cost of a profitable yet rejected project. e. all of the above are example of indirect agency costs. 2. A terminal loss a. is the difference between the UCC and adjusted cost of disposal when the UCC is greater. b. is the difference between the UCC and adjusted cost of disposal when the UCC is lesser. c. is the difference between the UCC and adjusted cost of disposal when they are equal. d. occurs whenever the UCC becomes negative. e. all of the above describes a terminal loss. 3. Stakeholders in the firm include a. the suppliers. b. the customers. c. the shareholders. d. none of the above. (this is weak. +1 mark adjusted) e. all of the above. 4. The carry-forward refers to (this is weak. +2 marks adjusted) a. using a year's capital losses to offset capital gains in any of the past three years. b. using a year's capital losses to offset capital gains in any of the next three years. c. paying for a year's interest revenues at any time in the future. d. using a year's capital losses to offset capital gains in any future year. e. using a year's capital losses to offset capital gains in any past year. Page 2 of 11
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5. From a financial point of view, which of the following statements is correct? a. Debt represents an ownership interest in the firm. b. Creditors normally have voting rights. c.
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This note was uploaded on 04/17/2008 for the course MGCR 341 taught by Professor Trainor during the Spring '08 term at McGill.

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midw2004ANSWERS - McGill University Centre for Continuing...

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