Finance 3 Areas:
1. Financial Management concerned with the creation and maintenance of economic value or
welfare. (Corporate Finance)
2. Capital Markets The markets where interest rates, stock and bond prices are determined
3. Investments relating to dec
1. Which of the following is NOT one of the four fundamental factors influencing
the cost of money?
a. Production opportunities
b. The number of publicly traded companies
c. Time preferences for consumption
What is the price paid
-1 Most large businesses go through "life cycles," beginning as corporations, then
converting to partnerships, and finally ending up as sole proprietorships, where one
individual owns the entire firm. True or false?
status: correct (1.
1.Financial statement analysis helps management and investors identify a firm's
strengths and weaknesses. Managers can then take actions to exploit the strengths and
improve the weaknesses, and investors can analyze the data and make estimates
Exam 1 Study Guide
Journal entries for the issuance of preferred stock or common stock for cash and or
o How does this affect the accounting equation? A = L + S/E
Journal entries for the purchase and
Exam 3 Study Guide
40 Multiple Choice Questions [40 points total]
4 problems [60 points total]
What is the master budget?
o Set of interrelated budgets that constitutes a plan of action for a specified time
Multiple Choice 20 questions
o Conceptual and short problems
o 1 from Chapter 18, 1 from Chapter 19, and two from Chapter 22
For Chapters 20 and 21, know definition of job order costing and
Finance 315 online: Extra Credit 1 solutions:
1a: The market risk premium is 8%-3% = 5%.
1b: Graphically, the slope increases. (See page 256 in our textbook).
1c: False, required rates of return rise. (See page 256)
1d: The new required rate of return is
DSO = S
= 0.5833= 58.33%.