MidtermKey - Midterm FIN370 Summer 2009 Key 1. The...

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Midterm FIN370 Summer 2009 Key 1. The potential conflict of interest between a firm's owners and its managers is referred to as a(n): A. control issue. B. management conflict. C. organizational problem. D. structure problem. E. agency problem. BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGE LEARNING OBJECTIVE NUMBER: 4 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 001 #7 SECTION: 1.5 TOPIC: AGENCY PROBLEM TYPE: DEFINITIONS 2. The process of managing a firm's long-term investments is called: A. asset allocation. B. risk management. C. working capital management. D. capital budgeting. E. capital structure management. BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGE LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 001 #1 SECTION: 1.2 TOPIC: CAPITAL BUDGETING TYPE: DEFINITIONS 3. What is the future value of $4,900 invested for 8 years at 7 percent compounded annually? A. $8,419.11 B. $8,564.35 C. $5,629.53 D. $7,644.15 E. $8,536.85 BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 004 #34 SECTION: 4.1 TOPIC: FUTURE VALUE TYPE: PROBLEMS
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4. A series of unending cash flows of equal amount that occur at equal intervals of time is called a(n): A. ordinary annuity. B. absolute annuity. C. perpetuity. D. perpetuity due. E. annuity due. BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGE LEVEL OF DIFFICULTY: BASIC Ross - Chapter 005 #3 SECTION: 5.2 TOPIC: PERPETUITY TYPE: DEFINITIONS 5. Common-size financial statements present all account values: A. as a percentage of sales. B. in percentage terms. C. in millions of dollars. D. as a percentage of the budgeted value. E. in growth terms. BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGE LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 003 #1 SECTION: 3.1 TOPIC: COMMON-SIZE STATEMENT TYPE: DEFINITIONS 6. Which one of the following will increase the cash flow from assets, all else constant? A. a decrease in the cash flow to creditors B. a decrease in dividends paid C. an increase in depreciation D. an increase in the change in net working capital E. an increase in net capital spending BLOOMS TAXONOMY QUESTION TYPE: ANALYSIS LEARNING OBJECTIVE NUMBER: 4 LEVEL OF DIFFICULTY: CHALLENGE Ross - Chapter 002 #42 SECTION: 2.4 TOPIC: CASH FLOW FROM ASSETS TYPE: CONCEPTS
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7. Conway & Sons had $26,500 in net fixed assets at the beginning of the year. During the year, the company purchased $5,700 in new equipment. It also sold, at a price of $1,000, some old equipment with a book value of $850. The depreciation expense for the year was $4,300. What is the net fixed asset balance at the end of the year? A. $20,800 B. $27,050 C. $15,650 D. $31,200 E. $26,900 BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 002 #57 SECTION: 2.1 TOPIC: NET FIXED ASSETS TYPE: PROBLEMS 8. Larson, Inc. has total assets of $248,000 and an equity multiplier of 2.5. What is the debt-equity ratio? A.
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This note was uploaded on 09/09/2011 for the course BUSINESS 300 taught by Professor N/a during the Spring '09 term at DeVry Chicago.

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MidtermKey - Midterm FIN370 Summer 2009 Key 1. The...

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