2026 BA 323 FINANCE – SDSU| LATEST
EDITION 2026 BA 323 FINANCE FINAL EXAM|
210 TEST PRACTICE HIGH YIELD QUESTIONS
WITH 100% VERIFIED ANSWERS AND
DETAILED RATIONALES| GUARANTEED PASS
GRADE A+
Question 1
What is generally the primary financial objective of a corporation?
A. Maximize accounting income
B. Maximize market share
C. Maximize shareholder wealth
D. Minimize taxes
Correct Answer: C. Maximize shareholder wealth
Rationale: The traditional financial-management objective is to maximize the
market value of shareholders' investment while recognizing risk and timing of
cash flows.
Question 2
Which of the following is normally a capital budgeting decision?
A. Determining the amount of cash to keep in a checking account
B. Deciding whether to purchase a new manufacturing machine
,C. Selecting a bank for payroll services
D. Determining the firm's dividend payment date
Correct Answer: B. Deciding whether to purchase a new manufacturing machine
Rationale: Capital budgeting involves evaluating long-term investments such as
equipment, facilities, technology, and expansion projects.
Question 3
Which financial-management decision concerns how a firm obtains the funds
needed to finance its assets?
A. Financing decision
B. Operating decision
C. Inventory decision
D. Marketing decision
Correct Answer: A. Financing decision
Rationale: Financing decisions determine the mix of debt, equity, and other
sources used to fund the firm's investments.
Question 4
A corporation's board of directors is primarily responsible for:
A. Performing every daily operating task
B. Monitoring management and representing shareholders' interests
C. Preparing every employee's tax return
D. Setting the price of every product
,Correct Answer: B. Monitoring management and representing shareholders'
interests
Rationale: The board provides oversight of management and helps protect
shareholders' interests.
Question 5
Which relationship can create an agency problem?
A. Customer and supplier
B. Manager and shareholder
C. Government and taxpayer
D. Manufacturer and retailer
Correct Answer: B. Manager and shareholder
Rationale: Agency problems arise when managers' interests differ from those of
shareholders and managers control resources on shareholders' behalf.
Question 6
Which action would most directly reduce an agency conflict between managers
and shareholders?
A. Eliminating financial reporting
B. Providing managers with performance-based compensation
C. Increasing unnecessary expenses
D. Removing board oversight
Correct Answer: B. Providing managers with performance-based compensation
, Rationale: Incentive compensation can align managers' financial interests with
those of shareholders.
Question 7
Which statement best describes a financial market?
A. A location where only physical goods are exchanged
B. A mechanism through which financial assets are issued and traded
C. A department within every corporation
D. A government tax collection system
Correct Answer: B. A mechanism through which financial assets are issued and
traded
Rationale: Financial markets facilitate the issuance and trading of securities and
the transfer of funds between savers and borrowers.
Question 8
A company sells newly issued shares directly to investors. This transaction occurs
in the:
A. Secondary market
B. Primary market
C. Derivatives market only
D. Used-equipment market
Correct Answer: B. Primary market
Rationale: The primary market is where newly issued securities are sold and the
issuing company receives the proceeds.
EDITION 2026 BA 323 FINANCE FINAL EXAM|
210 TEST PRACTICE HIGH YIELD QUESTIONS
WITH 100% VERIFIED ANSWERS AND
DETAILED RATIONALES| GUARANTEED PASS
GRADE A+
Question 1
What is generally the primary financial objective of a corporation?
A. Maximize accounting income
B. Maximize market share
C. Maximize shareholder wealth
D. Minimize taxes
Correct Answer: C. Maximize shareholder wealth
Rationale: The traditional financial-management objective is to maximize the
market value of shareholders' investment while recognizing risk and timing of
cash flows.
Question 2
Which of the following is normally a capital budgeting decision?
A. Determining the amount of cash to keep in a checking account
B. Deciding whether to purchase a new manufacturing machine
,C. Selecting a bank for payroll services
D. Determining the firm's dividend payment date
Correct Answer: B. Deciding whether to purchase a new manufacturing machine
Rationale: Capital budgeting involves evaluating long-term investments such as
equipment, facilities, technology, and expansion projects.
Question 3
Which financial-management decision concerns how a firm obtains the funds
needed to finance its assets?
A. Financing decision
B. Operating decision
C. Inventory decision
D. Marketing decision
Correct Answer: A. Financing decision
Rationale: Financing decisions determine the mix of debt, equity, and other
sources used to fund the firm's investments.
Question 4
A corporation's board of directors is primarily responsible for:
A. Performing every daily operating task
B. Monitoring management and representing shareholders' interests
C. Preparing every employee's tax return
D. Setting the price of every product
,Correct Answer: B. Monitoring management and representing shareholders'
interests
Rationale: The board provides oversight of management and helps protect
shareholders' interests.
Question 5
Which relationship can create an agency problem?
A. Customer and supplier
B. Manager and shareholder
C. Government and taxpayer
D. Manufacturer and retailer
Correct Answer: B. Manager and shareholder
Rationale: Agency problems arise when managers' interests differ from those of
shareholders and managers control resources on shareholders' behalf.
Question 6
Which action would most directly reduce an agency conflict between managers
and shareholders?
A. Eliminating financial reporting
B. Providing managers with performance-based compensation
C. Increasing unnecessary expenses
D. Removing board oversight
Correct Answer: B. Providing managers with performance-based compensation
, Rationale: Incentive compensation can align managers' financial interests with
those of shareholders.
Question 7
Which statement best describes a financial market?
A. A location where only physical goods are exchanged
B. A mechanism through which financial assets are issued and traded
C. A department within every corporation
D. A government tax collection system
Correct Answer: B. A mechanism through which financial assets are issued and
traded
Rationale: Financial markets facilitate the issuance and trading of securities and
the transfer of funds between savers and borrowers.
Question 8
A company sells newly issued shares directly to investors. This transaction occurs
in the:
A. Secondary market
B. Primary market
C. Derivatives market only
D. Used-equipment market
Correct Answer: B. Primary market
Rationale: The primary market is where newly issued securities are sold and the
issuing company receives the proceeds.
