BFIN 300 Exam 1 Study Guide | Business Finance Fundamentals & Practice
Questions 2026
What business structure has the least favorable tax treatment? - ANS ✔✔Corporations- they
have to pay 2x
One difference between an ordinary annuity and an annuity due is - ANS ✔✔an annuity due has
payments at the beginning of the period.
The interest rate that is quoted by a lender is referred to as: - ANS ✔✔The stated interest rate
and the effective annual rate.
Primus Bank offers two mortgage loan options, both 30 years, one with monthly payments and
one with payments every two weeks. For a mortgage of $150,000 at 4%, which option results in
the lowest interest paid? - ANS ✔✔The bi-weekly option.
amortizing loan - ANS ✔✔A loan where the borrower pays interest and a portion of principal is
known as a(n)
All else equal, with more frequent compounding the effective rate will be: - ANS ✔✔higher than
less frequent compounding.
The primary goal of financial management is to - ANS ✔✔maximize long-term shareholder
wealth.
Mixture of a firm's debt and equity financing? - ANS ✔✔Capital structure
Which form of business structure creates the least agency problem? - ANS ✔✔Sole
proprietorship
Questions 2026
What business structure has the least favorable tax treatment? - ANS ✔✔Corporations- they
have to pay 2x
One difference between an ordinary annuity and an annuity due is - ANS ✔✔an annuity due has
payments at the beginning of the period.
The interest rate that is quoted by a lender is referred to as: - ANS ✔✔The stated interest rate
and the effective annual rate.
Primus Bank offers two mortgage loan options, both 30 years, one with monthly payments and
one with payments every two weeks. For a mortgage of $150,000 at 4%, which option results in
the lowest interest paid? - ANS ✔✔The bi-weekly option.
amortizing loan - ANS ✔✔A loan where the borrower pays interest and a portion of principal is
known as a(n)
All else equal, with more frequent compounding the effective rate will be: - ANS ✔✔higher than
less frequent compounding.
The primary goal of financial management is to - ANS ✔✔maximize long-term shareholder
wealth.
Mixture of a firm's debt and equity financing? - ANS ✔✔Capital structure
Which form of business structure creates the least agency problem? - ANS ✔✔Sole
proprietorship