Liamxavier

capital budgeting - -the process of planning and managing a firm's long-term investments -capital structure - -the mixture of debt and equity maintained by a firm -working capital - -a firm's short term assets and liabilities -sole proprietorship - -a business owned by a single individual -partnership - -a business formed by two or more individuals or entities -corporation - -a business created as a distinct legal entity owned by one or more individuals or entities -agency pr...

Purpose of Financial Accounting - -Provide useful financial information to capital providers (investors and creditors) in making decisions -Cash Basis Accounting - -Difference between cash receipts and cash disbursements from providing goods and services= Net Operating Cash Flow -Short periods of time... - -Operating cash flows may not be an accurate predictor of future operating cash flows, sometimes a company pays or receives cash in one period that relates to performance in multiple per...

The Four Basic Areas of Finance are: - -1. Corporate Finance 2. Investments 3. Financial Markets and Institutions 4. International Finance -What is the focus of corporate finance (3 basic issues)? - -1. What long-term investments should a firm take on? 2. Where will you get the long-term financing to pay for your investment? 3. How will you manage your everyday financial activities such as collecting from customers and paying suppliers? -Capital Budgeting - -The process of planning an...

Three Traditional Fields of Finance - -1. Money and Banking 2. Investments 3. Financial Management -Financial Manager's Decisions - -1. Capital budgeting decisions 2. Financing decisions 3. Working capital management decisions -1. Capital budgeting decisions - -Identifying the productive assets the firms should buy -2. Financing decisions - -Determining how the firm should finance or pay for assets -3. Working capital management decisions - -Deterring how day-to-day financial ma...

Assests - -what the company owns(resources of a company): cash accounts receivable land equipment patent rights -Liabilities - -what the company owes: notes payable accounts payable salaries payable long-term debt -General areas of accounting the course relates too: - -financial statement preparation and reporting financial statement auditing and compliance loosely relates to: internal controls auditing and compliance -financial accountant - -hired by a firm to prepare financ...

Income Sources - -1. Earned - Wages (Most Taxed) 2. Portfolio - Stocks/Bonds 3. Passive - Real Estate (Least Taxed) -Real Estate Types - -1. Owner Occupancy - Live in (Less Risk) 2. Investment - Income 3. Speculation - Appreciation (More Risk) -Appraisal Profession - -1. The Appraisal Foundation (TAF) 2. Appraisal Qualifications Board (AQB) 3. Appraisal Standards Board (ASB) -Professional Designations of Appraisers - -MAI - Commercial SRA - Residential AI-GRS - Appraisal Revi...

Capital Budgeting - -the process of planning and managing a firms long term investments -size -time -risk -capital structure - -mixture of firms long term debt and equity the firm uses to finance it's operations -working capital - -deals w/ a firms short term assets (inventory) and short term liability (money owed to suppliers). managing this is a day to day activity that ensures the firm has sufficient resources to continue operations and avoid costly interruptions -agency prob...

capital budgeting process - -the process of identifying and evaluating capital projects (projects where the cash flow to the firm will be received over a period longer than one year) -4 administrative steps of capital budgeting process - -1. idea generation 2. analyzing project proposals (decision to accept/reject) 3. create firm-wide capital budget 4. monitoring decisions and conducting post-audit -5 key principles of capital budgeting process - -1. decisions based on cash flows, not a...

triangle arbitrage - -the act of exchanging through three currencies to exploit a mispriced trio of currency quotes -spot trade - -exchange currency immediately -spot rate - -the exchange rate for an immediate trade -forward trade - -agree today to exchange currency at some future date and some specified price -forward rate - -the exchange rate specified in the forward contract -if the forward rate is higher than the spot rate the foreign currency is what? - -selling at a premium ...

Corporate Finance - -The study of ways to answer these questions: Where will you get the long term financing for those investments? Will you bring in other owners or will you borrow the money? How will you manage your everyday financial activities such as collecting from customers and paying suppliers? What long term investments should you take on? That is, what lines of business will you be in what sorts of buildings, machinery, and equipment will you need? -Stockholders (owners) ar...

Globalization refers to the removal of barriers to free trade and the closer integration of national economies. - -True -The production of goods and services has become highly globalized due to emergence of large multinational companies. - -True -Country risk has no effect on a firm's cash flows. - -False -Stockholder wealth maximization is the accepted goal for firms in all countries around the world. - -False -The European manager's goal is to earn as much wealth as possible for ...

balance sheet --financial statement that reflects a firm's accounting value on a particular date -shareholders equity --the residual value of a corporation after all debts have been paid. consists of paid in surplus, common stock, and retained earnings -net working capital --the difference between a firm's current assets and its current liabilities. accounts payable, cash, inventory -income statement --reflects a firms performance over a period of time -earnings per share --amount ...

Chapter 1 NOTE: add chapter homework. - - -What is Finance? - -How well capital and investments are managed. -Finance stems from? - -Grew out of Economics and Accounting, requires knowledge of both Economics and Accounting. -Economist view on assets? - -argues that asset's value is based on the future cash flows the assets will provide. -Describe Accounting? - -Provides information regarding the likely size of the cash flows. -Who controls accounting department? - -Chief Financia...

An 80-year-old man was treated for ventricular arrhythmias. He presents 1 month later with joint pain. He also has an unusual mask-like rash over his face and body. Discontinuation of drug therapy causes the symptoms to abate. What drug was most likely administered to this patient? 1 Tocainide 2 Quinidine 3 Procainamide 4 Phenytoin 5 Propranolol - -Procainamide - often prescribed for long-term control of arrhythmias. May cause lupus like SE. -A 62-year-old woman with a long-standin...

What is the perimeter of the figure provided? - -29 cm The perimeter of the figure is 2 × (l + w) = 2 × (5.5 + 9) = 29 cm. -As shown below, a figure was cut along the dotted line to form a second figure. What statement is true about the figures? - -The area of the 2 figures is congruent, but the perimeter of the second figure is greater. The area is the same because the shapes occupy the same amount of space, but the perimeter is greater for the second figure because it has 2 new exter...

What is the perimeter of the figure provided? - -29 cm The perimeter of the figure is 2 × (l + w) = 2 × (5.5 + 9) = 29 cm. -As shown below, a figure was cut along the dotted line to form a second figure. What statement is true about the figures? - -The area of the 2 figures is congruent, but the perimeter of the second figure is greater. The area is the same because the shapes occupy the same amount of space, but the perimeter is greater for the second figure because it has 2 new exter...

Capital Structure - -The combination of debt and equity used to finance a company's assets and operations. Debt comes in the form of bond issues or loans, while equity may come in the form of common stock, preferred stock, or retained earnings. When analysts refer to capital structure, they are most likely referring to a firm's debt-to-equity (D/E) ratio, which provides insight into how risky a company's borrowing practices are. Usually, a company that is heavily financed by debt has a...

A customer buys AC Growth Fund and enjoys a substantial paper capital gain. When he believes the market has reached its peak, he switches into AC Income Fund within the AC family of funds. He incurs a small service fee but is not charged an additional sales charge. What is the tax effect? A) Any gain or loss is deferred until he liquidates the AC Income Fund. B) Any gain in AC Growth Fund is taxable because the exchange is treated as a sale and a purchase. C) It is a tax-free exchange....

Jade wants to buy a $200,000 term life insurance policy. She is 34 years old. Using the premium table, what is her annual premium for a 10 year policy? - -B. $1,202 -Sherita, age 37, wants to pay no more than $750 a year in life insurance. If the annual life insurance premium rate (per $1000 of face value) is $3.96, what is the largest 15-year term policy she can buy without spending more than $750 annually? - -A. $189,000 -Angelo, age 40, is comparing the premium for a $125,000 whole life...

A key difference between principles and theories is that: A)principles are based on data, whereas theories are based on intuitions. B) principles can be applied to a variety of different situations, whereas theories are specific to only one phenomenon. C) principles tend to be fairly stable over time, whereas theories are expanded and modified based on new research. D)principles provide possible explanations for learning or development, whereas theories simply identify important factors. - -...