FIN304review-examI - Study Guide for Mid-term Exam I...

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Study Guide for Mid-term Exam I (FIN304) Please review both the notes (handouts and those discussed in class) and the textbook. The exam should not be difficult for well-prepared students who keep up the reading, have a good grasp of concepts, and practice on the end-of-the-chapter problems. However, it won't be so for those who skipped the basic learning. The exam will include 26 multiple-choice questions * 4 points = 104 points I. Financial statements and cash flows 1. Balance sheet - total assets as the accumulative result of past investments - total liabilities as the sources of funding to support the past investments - net working capital = CA – CL - order on the balance sheet: liquidity of assets and time to maturity of liabilities - book value versus market value 2. Income statement - accounting realization principle for revenue and matching principle for costs - the recognition of both revenues and costs may not coincide with the actual cash flow timing 3. Taxes: marginal taxes and average taxes - Marginal tax rate are relevant in evaluating new investment projects which will bring in additional income to the company 4. Cash flow - lifeblood of an enterprise and the relevant number in most of financial analyses
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This note was uploaded on 10/12/2010 for the course FIN finance 30 taught by Professor Wenyutsay during the Spring '10 term at CSU San Marcos.

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FIN304review-examI - Study Guide for Mid-term Exam I...

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