FINANCE FINAL EXAM COB 300 JMU
QUESTIONS AND ANSWERS
Which form of efficient market asserts that asset prices fully reflect all information, which
includes both public and private information? - Answer-Strong-form efficient
Joe Analyst believes that he can predict the market by trading based on how
announced earnings differ from the expected earnings of a company. Joe is counting on
the market not being: - Answer-Semi-strong efficient
The Primary goal of financial management is to maximize? - Answer-The market value
of owners equity
Characteristics of a corporation? Owner liability and control? - Answer-Owner has
limited liability and owner has no operating control
Which one has double taxation? - Answer-C-corp
Dividends are determined by? - Answer-Corporations board of directors
Investors capital is best characterized as? - Answer-The sum of the market value of
debt and market value of equity
The rate of tax on the next dollar earned is? - Answer-marginal tax rate
How to calculate tax on sale: - Answer-Price sold for - Book value = Gain * Marginal tax
rate = Tax on sale
The Cash Conversion Cycle - Answer-Days sale outstanding + days in inventory - the
days payable outstanding
Which financial statement reports a company's capital expenditures during a particular
time period? - Answer-Statement of Cash Flows
What would decrease shareholders equity on a corporations Balance Sheet? - Answer-
The payment of dividends
As a company loosens its credit standards the investment in accounts receivable is
expected to? - Answer-increase
A plastics manufacturing company has decided to decrease inventory turnover from 10
times to 4 times per year. Assuming a constant sales level, which statement is true? -
Answer-The chance of spoilage increases
QUESTIONS AND ANSWERS
Which form of efficient market asserts that asset prices fully reflect all information, which
includes both public and private information? - Answer-Strong-form efficient
Joe Analyst believes that he can predict the market by trading based on how
announced earnings differ from the expected earnings of a company. Joe is counting on
the market not being: - Answer-Semi-strong efficient
The Primary goal of financial management is to maximize? - Answer-The market value
of owners equity
Characteristics of a corporation? Owner liability and control? - Answer-Owner has
limited liability and owner has no operating control
Which one has double taxation? - Answer-C-corp
Dividends are determined by? - Answer-Corporations board of directors
Investors capital is best characterized as? - Answer-The sum of the market value of
debt and market value of equity
The rate of tax on the next dollar earned is? - Answer-marginal tax rate
How to calculate tax on sale: - Answer-Price sold for - Book value = Gain * Marginal tax
rate = Tax on sale
The Cash Conversion Cycle - Answer-Days sale outstanding + days in inventory - the
days payable outstanding
Which financial statement reports a company's capital expenditures during a particular
time period? - Answer-Statement of Cash Flows
What would decrease shareholders equity on a corporations Balance Sheet? - Answer-
The payment of dividends
As a company loosens its credit standards the investment in accounts receivable is
expected to? - Answer-increase
A plastics manufacturing company has decided to decrease inventory turnover from 10
times to 4 times per year. Assuming a constant sales level, which statement is true? -
Answer-The chance of spoilage increases
