Principles of Financial Management Exam Questions With Correct Answers.

Principles
of
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Financial
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Management
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Exam Questions With Correct Answers
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Duties /of /Financial /Managers /- /correct /answer(s) /✔✔ /• /Measure /a /firm's /performance

• /Forecast /financial /consequences*

• /Recommend /new /investment

• /Locate /external /financing

• /Recommend /best /financing /mix

• /Determine /financial /expectations /of /owners



Financial /Management /Decisions /- /correct /answer(s) /✔✔ /Capital /budgeting

What /long-term /investments /or /projects /should /the /business /take /on?



Capital /structure

How /should /we /pay /for /our /assets?

Should /we /use /debt /or /equity?



Working /capital /management

How /do /we /manage /the /day-to-day /finances /of /the /firm?

, Basic
/Goal /of /the /Firm /- /correct /answer(s) /✔✔ /The /primary /financial /goal /of /the /business /firm /is /to


/maximize /the /wealth /of /the /firm's /owners /(or /the /value /of /the /firm)




Factors
/that /affect /the /value /of /a /firm /and /its /stock /price: /- /correct /answer(s) /✔✔ /Size /of /Cash /Flows



Timing /of /Cash /Flows

Risk /of /Cash /Flows



Forms /of /Business /Organization /- /correct /answer(s) /✔✔ /• /Sole /proprietorship /

• /Partnership

• /Corporation

• /LLC



Why /Evaluate /Financial /Statements? /- /correct /answer(s) /✔✔ /-Internal /uses

Performance /evaluation /- /compensation /and /comparison /between /divisions

Planning /for /the /future /- /guide /in /estimating /future /cash /flows



-External /uses

Creditors

Suppliers

Customers

Stockholders



Five
/Categories /of /Ratio /Analysis /- /correct /answer(s) /✔✔ /• /Liquidity /ratios /(short /term /solvency)



• /Financial /leverage /ratios /(long-term /solvency)