CFINMIAB - CFIN 601 Corporate Finance Comprehensive...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
CFIN 601 - Corporate Finance Comprehensive Individual Assignment Section 1 : Multiple Choice (30 questions; 30 marks). Select the best alternative for each of the following statements. 1. Deciding whether or not to open a new store is part of the process known as: A) Capital budgeting. B) Credit management. C) Capital structure. D) Cash management. E) Working capital management. 2. .The total market value of the firm's equity is determined by _______________. A) the corporate treasurer B) the firm's financial manager C) the firm's stakeholders D) the firm's stockholders E) regulatory authorities 3.Which of the following are disadvantages of the partnership form of ownership? A) Personal liability and double taxation B) Personal liability and limited firm life C) Double taxation and limited firm life D) Ease of formation and unlimited firm life E) Ease of formation and ease of ownership transfer 4.Which of the following is generally true regarding liquidity as it relates to the firm? A) Liquidity is detrimental to a firm because it allows the firm to pay its bills more easily, thereby avoiding financial distress B) Liquidity is valuable to a firm because liquid assets can be sold quickly without much loss in value C) Liquidity is valuable to a firm because a firm can borrow money using its liquid assets, such as a warehouse, as collateral D) Assets are generally listed on a firm's balance sheet in the order of increasing liquidity E) Liquid assets generally earn a large return, especially in comparison to illiquid assets 5.An income statement _____________________. A) measures performance as a snapshot on a specific date B) prepared according to GAAP, will show revenue when it accrues C) excludes accrued taxes payable D) includes expenses only when they are ultimately paid off in cash E) is an accurate representation of a firm's net cash flows
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
6.Suppose you have the 2003 income statement for a firm, along with the 12/31/2002 and 12/31/2003 balance sheets. How would you calculate net capital spending? A) Ending net fixed assets (2003) minus beginning net fixed assets (2002) plus 2003 depreciation B) Beginning net fixed assets (2002) minus ending net fixed assets (2003) plus 2003 depreciation C) Beginning net fixed assets (2002) plus ending net fixed assets (2003) minus 2003 depreciation D) Ending net fixed assets (2003) minus beginning net fixed assets (2002) plus 2003 taxes paid E) Ending net fixed assets (2003) plus beginning net fixed assets (2002) minus 2003 taxes paid 7. The net change in cash over a period of time is equal to A) cash uses plus operating cash flows B) additions to current assets minus expenditures on fixed assets C) net income plus depreciation, minus taxes and dividends D) ending cash minus changes in long-term debt minus additions to fixed assets E) cash flow from operating activities plus net cash from investment and financing activities
Background image of page 2
8.The financial manager of Gothic, Inc., tells her banker that Gothic's accounts receivable declined by $275,000 that day.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 10

CFINMIAB - CFIN 601 Corporate Finance Comprehensive...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online