MGF 405
False
The Gramm-Leach-Biley Act of 1999 recently overturned the Glass-Steagall Act of 1933, thereby strengthening the regulation of the US financial industry
False
A firm is considering a project which would - Increase accounts receivable by $10,000 - Increase account payable by $55,000 - & increase inventory by $30,000 in year 1 : Cash flow from assets (free cash flow) has increased in year 1
True
A firm is considering a project which would - Increase accounts receivable by $10,000 - Increase account payable by $55,000 - & increase inventory by $30,000 in year 1 : Net working capital has decreased in year 1
False
A firm is considering a project which would - Increase accounts receivable by $10,000 - Increase account payable by $55,000 - & increase inventory by $30,000 in year 1 : Net working capital has increased in year 1
False
A firm is considering a project which would - Increase accounts receivable by $10,000 - Increase account payable by $55,000 - & increase inventory by $30,000 in year 1 : Payments to creditors will slow in year 2
False
A firm is considering a project which would - Increase accounts receivable by $10,000 - Increase account payable by $55,000 - & increase inventory by $30,000 in year 1 : Sales will increase in year 2
False
Additions to net working capital are not considered a relevant, incremental cash flow in capital budgeting analysis
False
Advantages the corporate form of business has over sole proprietorship/partnerships is its unlimited liability
Capital, Flexibility
Advantages the corporate form of business has over sole proprietorship/partnerships is its: - Ability to raise large ______ - _________ in the change of ownership
False
Both partnerships and corporations incur double taxations
True
Both sole proprietorships and partnerships are taxed in a similar fashion
True
Erosion costs are considered a relevant, incremental cash flow in capital budgeting analysis
Agency
Extravagant use of perquisites by managers is an example of the ________ problem
True
Fixed asset salvage values are considered a relevant, incremental cash flow in capital budgeting analysis
Beginning
Interest payment = loan __________ balance * interest rate
False
Key requirement of the Sarbanes-Oxley Act: - Annual reports must be filed w/ the SEC within 30 days of year end
True
Key requirement of the Sarbanes-Oxley Act: - Officers (CEO/CFO) of a corp must personally vouch for the accounting statements
False
Key requirement of the Sarbanes-Oxley Act: - Officers of a corporation must now own more than 5% of the firm's stocl
False
Key requirement of the Sarbanes-Oxley Act: - The audit committee of a corp should include only inside directors, who have better information on the businesses of the corp
False
LLCs are usually taxed like corporations
Principal
Loan end balance = loan beginning balance - ________ payment
True
Opportunity costs are considered a relevant, incremental cash flow in capital budgeting analysis
False
Partnerships are the most complicated type of business
False
Partnerships have limited liability for general partners
Interest
Principal payment = Total payment - _______ payment
False
Sunk costs are considered a relevant, incremental cash flow in capital budgeting analysis
False
The major factors that directly determine the market value of a company's share of stock include book value of its assets
Risk, Timing, Size
The major factors that directly determine the market value of a company's share of stock include: - _____ of its cash flows - ______ of its cash flows - ____ of its cash flows
Accrues
The matching principle of GAAP dictates that the income statement records revenue when it ______
False
The primary goal of financial management is to avoid financial distress
False
The primary goal of financial management is to maintain steady earnings growth
False
The primary goal of financial management is to maximize current sales
True
The primary goal of financial management is to maximize the value per share of the stock
False
The primary goal of financial management is to minimize operational costs
Matching principle
The_________ __________ of GAAP dictates that the income statement records revenue when it accrues
Principal
Total payment = Interest payment + __________ payment
