©EVERLY 2025 ALL RIGHTS RESERVED
BFIN 300 Exam Questions And Answers
Latest Updated 2025 |100% Verified.
The discount rate that makes the net present value of an investment exactly equal to zero is the
- Answer✔Internal Rate of Return
Ratios that measure how effectively a firm's management uses its assets and equity to generate
bottom line net income are known as _____________ ratios - Answer✔Profitability
Efficient Market Hypothesis - Answer✔All securities in an efficient market are zero net present
value investments
Sunk costs include any cost that - Answer✔Has previously been incurred and cannot be
changed
An increase in total assets... - Answer✔Must be offset by an equal increase in liabilities and
stockholders' equity.
All else constant, a bond will sell at _________ when the yield to maturity is __________ the
coupon rate - Answer✔A premium; less than
Efficient financial markets fluctuate continuously because - Answer✔The markets are
continually reacting to new information
1
, ©EVERLY 2025 ALL RIGHTS RESERVED
_____ refers to the firm's interest payments less any net new borrowing - Answer✔Cash flow to
creditors
Payback is frequently used to analyze independent projects because - Answer✔It is easy and
quick to calculate
A business created as a distinct legal entity composed of one or more individuals or entities is a
- Answer✔Corporation
The ________________ breaks down return on equity into three component parts -
Answer✔Du Point Identity
Risk that affects at most a small number of assets is called - Answer✔Unsystematic Risk
The cash flows of a project should - Answer✔Include all incremental costs, including
opportunity costs
The rate at which a stock's price is expected to appreciate (or depreciate) is called the _____
yield - Answer✔Capital Gains
The internal rate of return for a project will increase if - Answer✔The initial cost of the project
can be reduced
A bond has a market price that exceeds its face value. Therefore, the - Answer✔Yield to
maturity is less than the coupon rate
It is easier to evaluate a firm using its financial statements when the firm - Answer✔Uses the
same accounting procedures as other firms in its industry
2
BFIN 300 Exam Questions And Answers
Latest Updated 2025 |100% Verified.
The discount rate that makes the net present value of an investment exactly equal to zero is the
- Answer✔Internal Rate of Return
Ratios that measure how effectively a firm's management uses its assets and equity to generate
bottom line net income are known as _____________ ratios - Answer✔Profitability
Efficient Market Hypothesis - Answer✔All securities in an efficient market are zero net present
value investments
Sunk costs include any cost that - Answer✔Has previously been incurred and cannot be
changed
An increase in total assets... - Answer✔Must be offset by an equal increase in liabilities and
stockholders' equity.
All else constant, a bond will sell at _________ when the yield to maturity is __________ the
coupon rate - Answer✔A premium; less than
Efficient financial markets fluctuate continuously because - Answer✔The markets are
continually reacting to new information
1
, ©EVERLY 2025 ALL RIGHTS RESERVED
_____ refers to the firm's interest payments less any net new borrowing - Answer✔Cash flow to
creditors
Payback is frequently used to analyze independent projects because - Answer✔It is easy and
quick to calculate
A business created as a distinct legal entity composed of one or more individuals or entities is a
- Answer✔Corporation
The ________________ breaks down return on equity into three component parts -
Answer✔Du Point Identity
Risk that affects at most a small number of assets is called - Answer✔Unsystematic Risk
The cash flows of a project should - Answer✔Include all incremental costs, including
opportunity costs
The rate at which a stock's price is expected to appreciate (or depreciate) is called the _____
yield - Answer✔Capital Gains
The internal rate of return for a project will increase if - Answer✔The initial cost of the project
can be reduced
A bond has a market price that exceeds its face value. Therefore, the - Answer✔Yield to
maturity is less than the coupon rate
It is easier to evaluate a firm using its financial statements when the firm - Answer✔Uses the
same accounting procedures as other firms in its industry
2
