1/6/26, 9:29 PM FINC 3610 Exam 1
FINC 3610 Exam 1 2026 | ALL QUESTIONS AND
CORRECT ANSWERS | GRADED A+ | VERIFIED
ANSWERS | NEWEST VERSI ON (JUST RELEASED)
corporate finance focuses on 3 basic questions
capital budgeting, capital structure, working capital management
capital budgeting asks
what should we invest in long-term?
capital structure asks
how do we finance those investments?
working capital management asks
how do we manage day-to-day operations of the firm?
what is capital budgeting?
the process of planning and managing the firm's long-term
investments
1/19
,1/6/26, 9:29 PM FINC 3610 Exam 1
what are key components of future cash flows?
size, timing, risk
what is capital structure?
the mix of debt and equity describing how the firm is financed
debt involves
borrowing money from investors
equity involves
selling a portion of the company
how do taxes affect decisions regarding capital structure?
insurance from debt is tax deductible
debt is a promise to _____, equity gets __________ ____
repay, everything else
what does short-term cash flow management entail?
(net) working capital, cash management, credit management
2/19
, 1/6/26, 9:29 PM FINC 3610 Exam 1
(net) working capital=
current assets - current liabilities
what are the different forms of business organizations?
sole proprietorship, partnership, corporation, limited liability
corporation
what are the pros of sole proprietorship?
easy startup, taxed as personal income
what are the cons of sole proprietorship?
unlimited liability, life limited to that of owner, equity limited to
owner's wealth, difficulty in transferring ownership
what are the pros of a partnership?
easy startup, taxed as personal income
what are the cons of a partnership?
general partners have unlimited liability, life limited to that of the
owners, equity limited to owners' combined wealth, difficulty in
transferring ownership
3/19
FINC 3610 Exam 1 2026 | ALL QUESTIONS AND
CORRECT ANSWERS | GRADED A+ | VERIFIED
ANSWERS | NEWEST VERSI ON (JUST RELEASED)
corporate finance focuses on 3 basic questions
capital budgeting, capital structure, working capital management
capital budgeting asks
what should we invest in long-term?
capital structure asks
how do we finance those investments?
working capital management asks
how do we manage day-to-day operations of the firm?
what is capital budgeting?
the process of planning and managing the firm's long-term
investments
1/19
,1/6/26, 9:29 PM FINC 3610 Exam 1
what are key components of future cash flows?
size, timing, risk
what is capital structure?
the mix of debt and equity describing how the firm is financed
debt involves
borrowing money from investors
equity involves
selling a portion of the company
how do taxes affect decisions regarding capital structure?
insurance from debt is tax deductible
debt is a promise to _____, equity gets __________ ____
repay, everything else
what does short-term cash flow management entail?
(net) working capital, cash management, credit management
2/19
, 1/6/26, 9:29 PM FINC 3610 Exam 1
(net) working capital=
current assets - current liabilities
what are the different forms of business organizations?
sole proprietorship, partnership, corporation, limited liability
corporation
what are the pros of sole proprietorship?
easy startup, taxed as personal income
what are the cons of sole proprietorship?
unlimited liability, life limited to that of owner, equity limited to
owner's wealth, difficulty in transferring ownership
what are the pros of a partnership?
easy startup, taxed as personal income
what are the cons of a partnership?
general partners have unlimited liability, life limited to that of the
owners, equity limited to owners' combined wealth, difficulty in
transferring ownership
3/19
