Practice_Prelim_2_Exam - HADM225 Practice Prelim #2

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HADM225 Practice Prelim #2 1. A current asset is best defined as: a. an asset, such as equipment, that is currently owned by a firm. b. an asset the firm expects to own within the next year. c. an asset which is expected to be converted into cash within the next year. d. the amount of cash on hand the firm currently shows on its balance sheet. e. the market value of the inventory currently owned by the firm. 2. The financial statement summarizing a firm's performance over a period of time is the: a. income statement. b. balance sheet. c. statement of cash flows. d. tax reconciliation statement. e. market value report. 3. All else constant, an increase in _____ will cause the cash flow from assets to increase. a. depreciation b. net capital spending c. net working capital d. taxes e. costs 4. According to the statement of cash flows, an increase in accounts receivable will _____ the cash flow from _____ activities. a. decrease; operating b. decrease; financing c. increase; operating d. increase; financing e. increase; investment 5. Which two of the following methods of project analysis are the most biased towards short-term projects? a. NPV and IRR b. PI and IRR c. payback and discounted payback d. NPV and discounted payback e. payback and PI
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6. The evaluation of a project based solely on its incremental cash flows is the basis of the: a. future cash flow method. b. stand-alone principle. c. dividend growth model. d. salvage value model. e. equivalent cost principle. 7. You are trying to determine whether to accept project A or project B. These projects are mutually exclusive. As part of your analysis, you should compute the crossover point by determining the: a. internal rate of return for the cash flows of each project.
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This test prep was uploaded on 02/20/2009 for the course H ADM 225 taught by Professor Jwellman during the Fall '07 term at Cornell University (Engineering School).

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Practice_Prelim_2_Exam - HADM225 Practice Prelim #2

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