finance exam 1
which of the following helps to alleviate the "agency problem" that generally occurs
between the owners and the managers of a public company? - answer managers are
promoted only if the firm prospers and management compensation is tied to the firm's
share price
an example of capital budgeting decision is deciding: - answer whether or not to
purchase a new machine for the production line
the prize in last week's florida lottery was estimated to be worth $40 million. if you were
lucky enough to win the state will pay you $2 million per year over the next 20 years.
assume that the first installment is received immediately. if interest rates are 8% what is
the present value of the prize? - answer$21,207,198
a business partner whose potential financial loss in the partnership will not exceed his
or her investment in that partnership is called a: - answerlimited partner
which of the following ratios is used to measure the liquidity of a firm? - answerquick
ratio
which of the following questions are addressed by financial manager? - answershould
customers be given 30-45 days to pay for their credit purchases, should the firms
borrow more money, should the firm acquire new equipment
which of the following is a sources of cash? - answeran increase in long-term debt
Shareholder A sold 500 shares of ABC stock on the New York Stock Exchange. This
transaction: - answerwas facilitated in the secondary market
A common-size income statement is an accounting statement that expresses all of a
firm's expenses as percentage of: - answersales
Art invested $100 two years ago at 8 percent interest. The first year, he earned $8
interest on his $100 investment. He reinvested the $8. The second year, he earned
$8.64 interest on his $108 investment. The extra $.64 he earned in interest the second
year is referred to as: - answerinterest on interest
Renee invested $2,000 six years ago at 4.5 percent interest. She spends her earnings
as soon as she earns any interest so she only receives interest on her initial $2,000
investment. Which type of interest is she earning? - answersimple interest
which of the following helps to alleviate the "agency problem" that generally occurs
between the owners and the managers of a public company? - answer managers are
promoted only if the firm prospers and management compensation is tied to the firm's
share price
an example of capital budgeting decision is deciding: - answer whether or not to
purchase a new machine for the production line
the prize in last week's florida lottery was estimated to be worth $40 million. if you were
lucky enough to win the state will pay you $2 million per year over the next 20 years.
assume that the first installment is received immediately. if interest rates are 8% what is
the present value of the prize? - answer$21,207,198
a business partner whose potential financial loss in the partnership will not exceed his
or her investment in that partnership is called a: - answerlimited partner
which of the following ratios is used to measure the liquidity of a firm? - answerquick
ratio
which of the following questions are addressed by financial manager? - answershould
customers be given 30-45 days to pay for their credit purchases, should the firms
borrow more money, should the firm acquire new equipment
which of the following is a sources of cash? - answeran increase in long-term debt
Shareholder A sold 500 shares of ABC stock on the New York Stock Exchange. This
transaction: - answerwas facilitated in the secondary market
A common-size income statement is an accounting statement that expresses all of a
firm's expenses as percentage of: - answersales
Art invested $100 two years ago at 8 percent interest. The first year, he earned $8
interest on his $100 investment. He reinvested the $8. The second year, he earned
$8.64 interest on his $108 investment. The extra $.64 he earned in interest the second
year is referred to as: - answerinterest on interest
Renee invested $2,000 six years ago at 4.5 percent interest. She spends her earnings
as soon as she earns any interest so she only receives interest on her initial $2,000
investment. Which type of interest is she earning? - answersimple interest
