CMA FINance - Courses| FIN5000|Logout CMAtest...

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Courses  |  FIN5000       Logout CMA test Acknowledgement: Berk et al.,  Fundamentals of Corporate Finance Chapter 1: Corporate Finance and the Financial Manager QUESTION 1 Which of the following is typically the major factor in limiting the growth of a sole trader? The organisation of such firms tends to become extremely complicated over time. It is extremely difficult to transfer control of such a firm to a new owner if the present owner dies or  wishes to sell the firm. The amount of money that can be raised by the firm is limited by the fact that the single owner must  make good all debts. Investors have a great deal of control over the day-to-day running of the firm, leading to confusion  when conflicts in direction arise. QUESTION 2 Use the figure for the following question: How much money would a stock exchange make from buying and selling 500 shares of the stock under  the conditions shown above? $250 $3000
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$210,375 Chapter 2: Introduction to Financial Statement Analysis QUESTION 3 Which of the following best describes why firms produce financial statements? to use as a tool when planning future investments within the firm to provide a means of enticing new investors to a firm to provide interested parties, both inside and outside the company, with an overview of the short and  long-term financial condition of a business to show what activities the company has undertaken in the previous financial year, and what activities  are planned for the near future QUESTION 4 Which of the following is NOT a financial statement that every public company is required to produce? income statement statement of sources and uses of cash statement of financial position cash flow statement QUESTION 5 Use the figure for the following question: Balance Sheet Assets Current Assets Liabilities Current Liabilities Cash Accounts receivable Inventories Total current assets 50 22  17 89 Accounts payable Notes payable/short-term debt   Total current liabilities 42 7   49 Long-Term Assets Long-Term Liabilities Net property, plant, and equipment Total long-term assets     Total Assets 121 121     210 Long-term debt  Total long-term liabilities Total Liabilities Shareholders’ Equity Total Liabilities and Shareholders’ Equity 128 128 177 33 210 The above table shows a balance sheet for a certain company. All quantities shown are in millions of  dollars. How would the balance sheet change if the company’s long-term assets were judged to  depreciate at an extra $5 million per year? Net property, plant, and equipment would rise to $126 million, and Total Assets and 
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CMA FINance - Courses| FIN5000|Logout CMAtest...

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