BFIN 300 midterm exam questions with
correct answers
The process of planning and managing a firm's long-term investments is called -
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CORRECT ANSWER✔✔-Capital Budgeting
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Which of the following is an example of an indirect agency cost? - CORRECT
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ANSWER✔✔-A lost opportunity | |
Which of the following forms of business organization is subject to double
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taxation? - CORRECT ANSWER✔✔-Corporation
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Control of a firm ultimately rests with - CORRECT ANSWER✔✔-The Stockholders
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Which of the following should a financial manager take into account when
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considering an opportunity? - CORRECT ANSWER✔✔-How much cash they expect
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to receive, When will they receive the funds and How likely they are to receive
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the funds
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ABC Corporation has current assets of $5,200, fixed assets of $26,000, current
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liabilities of $4,900, and long-term debt of $15,000. What is the ABC
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Corporation's total equity? What is the NWC of ABC Corporation? - CORRECT
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ANSWER✔✔-Total Equity $11,300, NWC $300 | | | |
, Company X has fixed assets of $6million on its balance sheet that were originally
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purchased for $10million; it can be sold for $7million today. The company's
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balance sheet also shows current liabilities of $2.6million and NWC of $900,000.
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In addition, if all the current assets were liquidated today, the company would
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receive $2.8million cash. What is the book value of Company X's total assets?
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What is the market value of Company X's total assets? - CORRECT ANSWER✔✔-
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BV $9.5million, MV $9.8million
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Company has sales of $21,000, costs of $11,200, depreciation expense of $2,300,
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and interest expense of $1,300. If the tax rate is 40 percent, what is the operating
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cash flow, or OCF? - CORRECT ANSWER✔✔-OCF $7320 = EBIT
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$7500+Depreciation $2300-Taxes $2480 | |
XYZ Corporation's balance sheet of 2019 showed net fixed assets of $1.56million,
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and the 2020 balance sheet showed net fixed assets of $1.78 million. The
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company's 2020 income statement showed a depreciation expense of $140,000.
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What was the company's net capital spending for 2020? - CORRECT ANSWER✔✔-
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$360,000
Which one of the following is the financial statement which shows the accounting
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value of a firm's equity as of a particular date? - CORRECT ANSWER✔✔-Balance
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sheet
Which is a financial leverage ratio? - CORRECT ANSWER✔✔-Debt to equity
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Which is a key turnover ratio? - CORRECT ANSWER✔✔-Inventory turnover ratio,
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Asset turnover ratio, Receivables turnover ratio and Fixed asset turnover ratio
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correct answers
The process of planning and managing a firm's long-term investments is called -
| | | | | | | | | | | | |
CORRECT ANSWER✔✔-Capital Budgeting
| |
Which of the following is an example of an indirect agency cost? - CORRECT
| | | | | | | | | | | | | |
ANSWER✔✔-A lost opportunity | |
Which of the following forms of business organization is subject to double
| | | | | | | | | | | |
taxation? - CORRECT ANSWER✔✔-Corporation
| | |
Control of a firm ultimately rests with - CORRECT ANSWER✔✔-The Stockholders
| | | | | | | | | |
Which of the following should a financial manager take into account when
| | | | | | | | | | | |
considering an opportunity? - CORRECT ANSWER✔✔-How much cash they expect
| | | | | | | | |
to receive, When will they receive the funds and How likely they are to receive
| | | | | | | | | | | | | | | |
the funds
|
ABC Corporation has current assets of $5,200, fixed assets of $26,000, current
| | | | | | | | | | | |
liabilities of $4,900, and long-term debt of $15,000. What is the ABC
| | | | | | | | | | | |
Corporation's total equity? What is the NWC of ABC Corporation? - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-Total Equity $11,300, NWC $300 | | | |
, Company X has fixed assets of $6million on its balance sheet that were originally
| | | | | | | | | | | | | |
purchased for $10million; it can be sold for $7million today. The company's
| | | | | | | | | | | |
balance sheet also shows current liabilities of $2.6million and NWC of $900,000.
| | | | | | | | | | | |
In addition, if all the current assets were liquidated today, the company would
| | | | | | | | | | | | |
receive $2.8million cash. What is the book value of Company X's total assets?
| | | | | | | | | | | | |
What is the market value of Company X's total assets? - CORRECT ANSWER✔✔-
| | | | | | | | | | | |
BV $9.5million, MV $9.8million
| | |
Company has sales of $21,000, costs of $11,200, depreciation expense of $2,300,
| | | | | | | | | | | |
and interest expense of $1,300. If the tax rate is 40 percent, what is the operating
| | | | | | | | | | | | | | |
cash flow, or OCF? - CORRECT ANSWER✔✔-OCF $7320 = EBIT
| | | | | | | | | | |
$7500+Depreciation $2300-Taxes $2480 | |
XYZ Corporation's balance sheet of 2019 showed net fixed assets of $1.56million,
| | | | | | | | | | | |
and the 2020 balance sheet showed net fixed assets of $1.78 million. The
| | | | | | | | | | | | |
company's 2020 income statement showed a depreciation expense of $140,000.
| | | | | | | | | |
What was the company's net capital spending for 2020? - CORRECT ANSWER✔✔-
| | | | | | | | | | |
$360,000
Which one of the following is the financial statement which shows the accounting
| | | | | | | | | | | |
value of a firm's equity as of a particular date? - CORRECT ANSWER✔✔-Balance
| | | | | | | | | | | | | |
sheet
Which is a financial leverage ratio? - CORRECT ANSWER✔✔-Debt to equity
| | | | | | | | | |
Which is a key turnover ratio? - CORRECT ANSWER✔✔-Inventory turnover ratio,
| | | | | | | | | | |
Asset turnover ratio, Receivables turnover ratio and Fixed asset turnover ratio
| | | | | | | | | |
