Chapter 2: Financial Statements, Taxes, and Cash Flow
Financial Statements, Taxes, and Cash Flow
Topic: BALANCE SHEET
1. The financial statement showing a firm's accounting value on a particular date is the:
A) Income statement.
Chapter 17: Working Capital Management
Working Capital Management
Topic: SPECULATIVE MOTIVE
1. The need to hold cash to take advantage of additional investment opportunities is called the:
A) Speculative motive.
Chapter 16: Short-Term Financial Planning
Short-Term Financial Planning
Topic: OPERATING CYCLE
1. The length of time between the acquisition of inventory and the collection of cash from
receivables is called the _.
A) operating c
Chapter 15: Raising Capital
Topic: VENTURE CAPITAL
1. The financing provided for start-up, often high-risk, private business enterprises is called:
A) Venture capital.
B) Junk bonds.
C) Flotation costs.
Chapter 14: Dividends and Dividend Policy
Dividends and Dividend Policy
1. Payments made out of a firm's earnings to its owners in the form of cash or stock are called:
C) Share re
Chapter 13: Leverage and Capital Structure
Leverage and Capital Structure
Topic: HOMEMADE LEVERAGE
1. The use of personal borrowing to change the overall amount of financial leverage to which the
individual is exposed is called:
Chapter 12: Cost of Capital
Cost of Capital
Topic: COST OF CAPITAL
1. The opportunity cost associated with the firm's capital investment in a project is called its:
A) Cost of capital.
B) Beta coefficient.
C) Capital gains yield.
Chapter 11: Risk and Return
Risk and Return
1. A portfolio is _.
A) a group of assets, such as stocks and bonds, held as a collective unit by an investor
B) the expected return on a risky asset
C) the expected r
Chapter 10: Some Lessons from Capital Market History
Some Lessons from Capital Market History
Topic: RISK PREMIUM
1. The excess return required on a risky asset over that earned on a risk-free asset is called (a):
A) Risk premium
Chapter 9: Making Capital Investment Decisions
Making Capital Investment Decisions
Topic: INCREMENTAL CASH FLOWS
1. The changes in the firm's future cash flows that are a direct consequence of accepting a project
Chapter 8: Net Present Value and Other Investment Criteria
Net Present Value and Other Investment Criteria
Topic: NET PRESENT VALUE
1. The difference between the market value of an investment and its cost is the:
A) Net present va
Chapter 7: Equity Markets and Stock Valuation
Equity Markets and Stock Valuation
Topic: GROWING PERPETUITY
1. An asset characterized by cash flows that increase at a constant rate forever is called a:
A) Growing perpetuity.
Chapter 6: Interest Rates and Bond Valuation
Interest Rates and Bond Valuation
1. The stated interest payment, in dollars, made on a bond each period is called the bond's:
B) Face value.
Chapter 5: Discounted Cash Flow Valuation
Discounted Cash Flow Valuation
1. An annuity stream of cash flow payments is:
A) A set of level cash flows occurring each time period for a fixed length of time.
B) A set of
Chapter 4: Introduction to Valuation: The Time Value of Money
Introduction to Valuation: The Time Value of Money
Topic: FUTURE VALUE
1. The amount an investment is worth after one or more periods of time is the _.
A) future value
Chapter 3: Working with Financial Statements
Working with Financial Statements
Topic: SOURCES OF CASH
1. Activities of the firm that generate cash are known as:
A) Sources of cash.
B) Uses of cash.
C) Cash payments.
D) Cash receip
Chapter 18: International Aspects of Financial Management
International Aspects of Financial Management
Topic: AMERICAN DEPOSITORY RECEIPT
1. A security that is issued in the United States that represents shares of a foreign stoc