FIN 320 Final Exam
The mixture of debt and equity used to finance a firms operations is called: - correct answers Capital Structure
Which of the following is not a type of agency cost? - correct answers The cost of financing the firm.
Define the Agency Problem: - correct answers Conflict of interests between the oweners and managers of a firm.
Increase of which of the following will decrease the Operating Cash Flow? - correct answers Taxes Paid.
Define OCF - correct answers Cash generated from a firms normal business activities
An increase in Net Working Capital is: - correct answers a cash inflow for the firm
Define Net Working Capital: - correct answers Current Assets less Current Liabilities
An American dollar deposited in a London bank is a: - correct answers Eurodollar deposit
Define Eurocurrency: - correct answers Money deposited in a financial center outside of the country whose currency is involved.
Which of the following will increase the length of a firms cash cycle? - correct answers Accounts Recieveable period increase & Accounts Payable Turn Over increase
Sustainable growth will decrease with increases in: - correct answers Dividend payouts Define Sustainable Growth Rate: - correct answers The maximum possible growth rate a firm can achieve without external equity financing while retaining a constant debt-equity ratio.
Which of the following is a source of cash? - correct answers Collecting Accounts Receivable
If the US dollar strengthens against the Japanese Yen, what will occur? - correct answers Japanese imports will be less expensive in the United States.
What will increase cash? - correct answers Increases in: Long term debt, equity, current liabilities.
Decreases in: Current assets & fixed assets
Increases in cash mean: - correct answers Firms are getting paid. (sell inventory, receive payment, etc.)
What will decrease cash? - correct answers Decreases in: long term debt, equity, current liabilities.
Increases in: Current assets & fixed assets
Decreases in cash mean: - correct answers The firm is paying out cash. (Paying off debt, buying more property, etc)
When comparing investments of equal amounts and equal time period, you should select the investment
that has the highest: - correct answers Effective Annual Rate
The interest rate expressed as if it were compounded once per year is called the: - correct answers EAR
Sustainable growth will increase with increase in: - correct answers Retention ratio (retained earnings)
If the US dollar depreciates against the Yen, what will occur? - correct answers Japanese imports will be more expensive in the US & American imports will be less expensive in Japan
Present values decrease as: - correct answers the discount rate increases
The mixture of debt and equity used to finance a firms operations is called: - correct answers Capital Structure
Which of the following is not a type of agency cost? - correct answers The cost of financing the firm.
Define the Agency Problem: - correct answers Conflict of interests between the oweners and managers of a firm.
Increase of which of the following will decrease the Operating Cash Flow? - correct answers Taxes Paid.
Define OCF - correct answers Cash generated from a firms normal business activities
An increase in Net Working Capital is: - correct answers a cash inflow for the firm
Define Net Working Capital: - correct answers Current Assets less Current Liabilities
An American dollar deposited in a London bank is a: - correct answers Eurodollar deposit
Define Eurocurrency: - correct answers Money deposited in a financial center outside of the country whose currency is involved.
Which of the following will increase the length of a firms cash cycle? - correct answers Accounts Recieveable period increase & Accounts Payable Turn Over increase
Sustainable growth will decrease with increases in: - correct answers Dividend payouts Define Sustainable Growth Rate: - correct answers The maximum possible growth rate a firm can achieve without external equity financing while retaining a constant debt-equity ratio.
Which of the following is a source of cash? - correct answers Collecting Accounts Receivable
If the US dollar strengthens against the Japanese Yen, what will occur? - correct answers Japanese imports will be less expensive in the United States.
What will increase cash? - correct answers Increases in: Long term debt, equity, current liabilities.
Decreases in: Current assets & fixed assets
Increases in cash mean: - correct answers Firms are getting paid. (sell inventory, receive payment, etc.)
What will decrease cash? - correct answers Decreases in: long term debt, equity, current liabilities.
Increases in: Current assets & fixed assets
Decreases in cash mean: - correct answers The firm is paying out cash. (Paying off debt, buying more property, etc)
When comparing investments of equal amounts and equal time period, you should select the investment
that has the highest: - correct answers Effective Annual Rate
The interest rate expressed as if it were compounded once per year is called the: - correct answers EAR
Sustainable growth will increase with increase in: - correct answers Retention ratio (retained earnings)
If the US dollar depreciates against the Yen, what will occur? - correct answers Japanese imports will be more expensive in the US & American imports will be less expensive in Japan
Present values decrease as: - correct answers the discount rate increases
