QUIZ 1: FIN 301
Which formula below represents a present value factor?
1/(1 + r)^t
Which formula will you enter into a spreadsheet cell to determine how long it will take $40 to grow to $240 at an interest rate of 6.53% compounded annually?
=NPER(0.0653,0,−40,240)
The aim of the act known as _____ is to protect investors form corporate abuse.
SOX
In addition to the importance of finance for marketing, accounting, and management careers, finance is also now considered a _____ discipline, especially at the graduate level. Multiple choice question.
STEM
Which one of the following parties would be the last party to receive payment if a firm were to close? Assume all parties have a legitimate claim on the firm's assets.
Shareholders
What is the main goal of financial management?
To maximize current value per share of existing stock
A balance sheet reflects a firm's ______ value on a particular date.
accounting
The idea behind ______ is that interest is earned on interest.
compounding
Joint stock company is another name for what is referred to as a ________ in the United States.
corporation
Due to the extreme costs of SOX, hundreds of public firms have chosen to "go _______" meaning their shares are no longer traded on the major stock exchanges.
dark
The matching principle of GAAP requires revenues be matched with _____.
expenses
The five main areas of finance are corporate finance, _____, financial institutions, international finance, and fintech.
investments
A corporation is a distinct ______ entity and as such can have a name and take advantage of the legal powers of natural persons.
legal
The ___________ principle of GAAP states that costs associated with a good or service should be recorded at the same time as the revenue from selling that good or service.
matching
The basic present value equation underlies many of the _____.
most important ideas in corporate finance
A business without separate legal authority formed by two or more people is known as a _____.
partnership
If you want to know how much you need to invest today at 12 percent compounded annually in order to have $4,000 in five years, you will need to find a(n) _______ value.
present
Because shareholders get paid last after all other obligations are satisfied, they are often called _____.
residual owners
The corporate goal involving bankruptcy avoidance, stability, and safety relate to controlling _______.
risk
An official accounting statement that helps to explain the change in cash and cash equivalents is called the _____.
statement of cash flows
A benefit corporation is for profit, and has the legal attributes of accountability, _____, and purpose.
transparency
The basic present value equation is:
PV = FVt/(1+r)^t
Net income refers to money earned ______.
after interest and taxes
Future value is the ________ value of an investment at some time in the future.
cash
A long-term liability represents a(n) _____. Multiple choice question.
debt that is not due in the coming year
Interest earned on the original principal amount invested is called _____. Multiple choice question.
simple interest
The financial manager acts in the shareholders' best interests by making decisions that increase the value of _____.
the stock
A partnership must have at least _______ owners.
two
What are the two basic classifications under which most potential financial goals fall?
Earning or increasing profits and controlling risk
Which of the following is the correct mathematical formula for calculation of the future value of $100 invested today for 3 years at 10% per year?
FV = $100 × (1.10)^3
______ refers to the speed and ease with which an asset can be converted to cash.
Liquidity
A sole proprietorship is a business that _______.
is owned by one person
Most importantly, assets provide ______ to the firm.
value
When a corporation is formed, it is granted which of the following rights?
State citizenship for jurisdictional purposes, The ability to issue stock, Legal powers to sue
A _________ corporation is for profit, and has the legal attributes of accountability, transparency, and purpose.
benefit
The more debt a firm has, the greater its:
degree of financial leverage