Financial Management Exam 1 Multiple Choice Questions with Correct Answers

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 Answer 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 Answer 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 Answer 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 Answer C: What the earnings per Share target should be for the next year.