Fin_pq3 - University of Houston-Victoria FIN 6352 Financial...

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FIN 6352 Financial Management FMQuiz03 Dr. Xavier Garza Gómez University of Houston-Victoria (Extra Credit) FIN 6352 Financial Management Review Quiz for Chapter 3 - Financial Statements, Cash Flows and Taxes True-False 1. Total net operating capital is equal to net fixed assets. a. True b. False 2. Net operating profit after taxes (NOPAT) is the amount of profit a company would have from its operations if it had no interest income or interest expense. a. True b. False 3. Interest paid by a corporation is a tax deduction for the paying corporation, but dividends paid are not deductible. This treatment, other things held constant, tends to encourage the use of debt financing by corporations. a. True b. False Multiple Choice: Concepts 4. Which of the following best describes free cash flow? a. Free cash flow is the amount of cash flow available for distribution to all investors af- ter all necessary investments in operating capital have been made. b. Free cash flow is the amount of cash flow available for distribution to shareholders after all necessary investments in operating capital have been made. c. Free cash flow is the net change in the cash account on the balance sheet. d. Free cash flow is equal to net income plus depreciation. e.
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This note was uploaded on 10/26/2008 for the course MKTG 6352 taught by Professor Garza during the Spring '08 term at Texas A&M.

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Fin_pq3 - University of Houston-Victoria FIN 6352 Financial...

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