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Unformatted text preview: NAME ________________________ FIN3014--Principles of Business Finance Spring 2010 Exam 1--Test Form A Put away all items except for your ParScore, Pencils, UTSA ID, and calculator. Only a HP10BII or TI BAII calculator may be used. NO OTHER ELECTRONIC ITEMS MAY BE USED. Use of any other items will result in your receiving a "0" for the exam. Place your name on this exam paper and on your ParScore. Bubble in you Banner ID on your ParScore. Bubble in the test form letter under test form . Leave exam number blank. Failure to follow these instructions will result in 10 points being deducted from your exam grade. The professor will call time at the end of the exam. You must stop working when the professor signals the end of the exam. Continuing to work on the exam after time is called will result in your receiving a "0" for the exam. Select the best answer for each of the following questions. You may write on this exam but you must place your final responses on your ParScore. 1) Which of the following is a TRUE statement? A) Net income does not correspond to cash earned because non- cash entries such as depreciation appear as expenses on the income statement. B) Purchases of new property, plant, and equipment are reported in the "operating activity" portion of the statement of cash flows. C) The statement of cash flows is divided into three sections: assets, liabilities, and shareholders' equity. D) Increases in inventory are recorded as an expense on the income statement even thought it does not represent an actual cash outflow. 2) Which of the following is the overarching principal that a financial manager should follow when making decisions? A) Decisions should be made that give the greatest benefit to the firm's employees and customers. B) Decisions should be made that increase revenue. C) Decisions should generate the greatest market share for the company. D) Decisions should increase the value of the firm to its shareholders. 3) Manufacturer A has a profit margin of 2.0%, an asset turnover of 1.7 and an equity multiplier of 4.9. Manufacturer B has a profit margin of 2.3%, an asset turnover of 1.1 and an equity multiplier of 4.7. How much asset turnover should manufacturer B have to match manufacturer A's ROE? A) 3.09% B) 1.54% C) 3.00% D) 4.77% 1 4) What is the largest stock market in the world? A) The Tokyo Stock Exchange B) NASDAQ C) The American Stock Exchange D) The New York Stock Exchange 5) Owen expects to receive $20,000 at the end of next year from a trust fund. If a bank loans money at an interest rate of 7.5%, how much money can he borrow from the bank today on the basis of this information? A) $11,428 B) $18,605 C) $21,500 D) $15,000 6) Which of the following is the correct way to use the DuPont analysis to calculate ROE?...
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This note was uploaded on 04/06/2012 for the course ECO 3033 taught by Professor Truett during the Spring '12 term at University of Texas at Austin.
- Spring '12