Financial Management Exam 1 Multiple
Choice Questions And Answers | 2025
Verified
An investment that returns a fixed amount of money at the end of each year for a fixed
period of time is referred to as:
a) an annuity
b) a level perpetuity
c) a growing perpetuity
d) a good investment CORRECT ANSWERS A: An Annuity
Which of the following is NOT one of the 5 Principles of Finance?
a) Market prices reflect information.
b) The buck stops here.
c) Cash flows are the source of value.
d) Money has a time-value of money.
e) Individuals respond to incentives. CORRECT ANSWERS B: The Buck Stops here.
3 roles which are uniquely played by the finance leader in any organization are:
a) Owner, Operator and Overseer;
b) Operator, Strategist, People Leader;
c) Owner, Overseer, Public spokesperson CORRECT ANSWERS A: Owner, operator,
and overseer
Which is NOT among the basic questions addressed by finance include:
a) How to allocate capital.
b) What is the correct capital structure for the firm.
c) What the Earnings per Share target should be for the next year.
d) How to best manage working capital. CORRECT ANSWERS C: What the earnings
per Share target should be for the next year.
When evaluating the Present Value of an investment, which of the following should NOT
factor into your decision?
a) Taxes
b) Interest payments
c) The initial cash investment requirement
d) Depreciation CORRECT ANSWERS D: Depreciation
Cash Flow from Operations divided by Net Income is a measure that can help
determine:
a) the quality of a firm's earnings
b) the liquidity of a firm
c) how much of a firm's capital expenditures it is able to fund from operations
Choice Questions And Answers | 2025
Verified
An investment that returns a fixed amount of money at the end of each year for a fixed
period of time is referred to as:
a) an annuity
b) a level perpetuity
c) a growing perpetuity
d) a good investment CORRECT ANSWERS A: An Annuity
Which of the following is NOT one of the 5 Principles of Finance?
a) Market prices reflect information.
b) The buck stops here.
c) Cash flows are the source of value.
d) Money has a time-value of money.
e) Individuals respond to incentives. CORRECT ANSWERS B: The Buck Stops here.
3 roles which are uniquely played by the finance leader in any organization are:
a) Owner, Operator and Overseer;
b) Operator, Strategist, People Leader;
c) Owner, Overseer, Public spokesperson CORRECT ANSWERS A: Owner, operator,
and overseer
Which is NOT among the basic questions addressed by finance include:
a) How to allocate capital.
b) What is the correct capital structure for the firm.
c) What the Earnings per Share target should be for the next year.
d) How to best manage working capital. CORRECT ANSWERS C: What the earnings
per Share target should be for the next year.
When evaluating the Present Value of an investment, which of the following should NOT
factor into your decision?
a) Taxes
b) Interest payments
c) The initial cash investment requirement
d) Depreciation CORRECT ANSWERS D: Depreciation
Cash Flow from Operations divided by Net Income is a measure that can help
determine:
a) the quality of a firm's earnings
b) the liquidity of a firm
c) how much of a firm's capital expenditures it is able to fund from operations
