Finance Exam 1

25 July 2022
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22 test answers

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question
mixture of debt and equity is referred to as the firm's:
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capital structure
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Jenna has been promoted and is now in charge of all external financing. In other words, she is in charge of:
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capital structure management
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Theo's BBQ has $48,000 in current assets and $39,000 in current liabilities. Decisions related to these accounts as referred to as:
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working capital management.
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An agency issue is most apt to develop when:
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the control of a firm is separated from the firm's ownership.
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Which one of the following is a working capital decision?
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How much cash should the firm keep in reserve?
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Which one of the following is a capital structure decision?
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Establishing the preferred debt-equity level
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Working capital management includes which one of the following?
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Determining which customers will be granted credit
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The daily financial operations of a firm are primarily controlled by managing the:
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working capital
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The Sarbanes-Oxley Act of 2002 has:
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essentially made officers of publicly traded firms personally responsible for the firm's financial statements. -Increase the protections against corporate fraud
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Which one of the following situations is most apt to create an agency conflict?
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Basing management bonuses on the length of employment
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An auction market:
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has a physical trading floor
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Beginning in 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act requires corporations with a market value over ________ to allow a nonbinding shareholder vote on executive pay.
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$75,000,000
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Which one of the following statements related to securities dealers is correct?
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Dealers buy and sell from their own inventory
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Which one of the following has nearly the same meaning as free cash flow
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Cash Flow from assets
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Shareholders' equity is the residual value of a firm. (T/F)
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True
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Financial leverage:
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the use of borrowed funds to increase the return on owners' equity
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Which one of the following indicates that a firm has generated sufficient internal cash flow to finance its entire operations for the period?
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Positive cash flow form assets
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The T-shirt Hut successfully managed to reduce its general and administrative costs this year. This cost improvement will increase which of the following ratios?
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I. Profit margin II. Return on assets IV. Return on equity
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Which one of the following is a graphical representation of the operating and cash cycles?
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Cash flow Time Line
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Accounts receivable financing is the term used to describe which one of the following types of loans that involve either the assignment or the factoring of a firm's accounts receivable?
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Secured Short Term Loan
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A firm is less apt to face financial distress if it adopts a flexible financial policy rather than a restrictive policy. (T/F)
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True
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Which statement related to a cash budget is correct?
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Financially healthy firms can have a negative quarterly net cash inflow.