FIN 8113 (Corporate Finance) exam 1
UPDATED ACTUAL Exam Questions and
CORRECT Answers
addition to retained earnings - CORRECT ANSWER - = Net Income - Dividends
Net Income - CORRECT ANSWER - = Dividends + addition to retained earnings
Net Working Capital - CORRECT ANSWER - = Current Assets - Current Liabilities
Income Statement - CORRECT ANSWER - Sales
Costs
Depreciation
______________
EBIT
Interest
________
EBT (taxable income)
Taxes
_______
Net Income
Book Value Assets - CORRECT ANSWER - Book Value CA + Book Value NFA
Market Value Assets - CORRECT ANSWER - Market Value CA + Market Value NFA
marginal tax rate - CORRECT ANSWER - the tax you would pay (in percent) if you
earned one more dollar
, Average Tax Rate - CORRECT ANSWER - your tax bill divided by your taxable income
Operating Cash Flow - CORRECT ANSWER - EBIT + Depreciation - Taxes
Net Capital Spending - CORRECT ANSWER - = NFAend - NFAbeg + Depreciation
Internal Growth Rate - CORRECT ANSWER - = (ROA x b) / 1 - ROA x b
Sustainable Growth Rate - CORRECT ANSWER - ROE x b / 1 - ROE x b
ROE - CORRECT ANSWER - = PM x TAT x EM
The DuPont System
equity multiplyer - CORRECT ANSWER - EM
Total Asset Turnover - CORRECT ANSWER - TAT
Profit Margin - CORRECT ANSWER - PM
Pro Forma Statements - CORRECT ANSWER - "best guess" statements (financial
planning)
Cash Flow to Creditors - CORRECT ANSWER - = Interest paid - Net new borrowing
= Interest paid - (LTDend - LTDbeg)
UPDATED ACTUAL Exam Questions and
CORRECT Answers
addition to retained earnings - CORRECT ANSWER - = Net Income - Dividends
Net Income - CORRECT ANSWER - = Dividends + addition to retained earnings
Net Working Capital - CORRECT ANSWER - = Current Assets - Current Liabilities
Income Statement - CORRECT ANSWER - Sales
Costs
Depreciation
______________
EBIT
Interest
________
EBT (taxable income)
Taxes
_______
Net Income
Book Value Assets - CORRECT ANSWER - Book Value CA + Book Value NFA
Market Value Assets - CORRECT ANSWER - Market Value CA + Market Value NFA
marginal tax rate - CORRECT ANSWER - the tax you would pay (in percent) if you
earned one more dollar
, Average Tax Rate - CORRECT ANSWER - your tax bill divided by your taxable income
Operating Cash Flow - CORRECT ANSWER - EBIT + Depreciation - Taxes
Net Capital Spending - CORRECT ANSWER - = NFAend - NFAbeg + Depreciation
Internal Growth Rate - CORRECT ANSWER - = (ROA x b) / 1 - ROA x b
Sustainable Growth Rate - CORRECT ANSWER - ROE x b / 1 - ROE x b
ROE - CORRECT ANSWER - = PM x TAT x EM
The DuPont System
equity multiplyer - CORRECT ANSWER - EM
Total Asset Turnover - CORRECT ANSWER - TAT
Profit Margin - CORRECT ANSWER - PM
Pro Forma Statements - CORRECT ANSWER - "best guess" statements (financial
planning)
Cash Flow to Creditors - CORRECT ANSWER - = Interest paid - Net new borrowing
= Interest paid - (LTDend - LTDbeg)
