FIN 311 Exam 1

Which of the following can be determined using the future value approach to compound growth developed in this chapter? Dividend Growth Sales Growth Erratic Growth

Dividend Growth Sales Growth

______ budgeting is the process of making and managing expenditures on long-term assets. Multiple choice question. Capital Optional Conventional Performance-based

Capital

Finance is only important to study if you are planning a career in finance. True false question.

False

Which of the following are considered stakeholders in a company? Multiple select question. Government Competitor Employees Suppliers

Government Employees Suppliers

Which of the following are among the most important questions to be asked when a business is started? Multiple select question. How much vacation will I be able to take if I own my own business? What long-term investments should be made? How will everyday financial activities be handled? Where will long-term financing be obtained to pay for investments?

What long-term investments should be made? How will everyday financial activities be handled? Where will long-term financing be obtained to pay for investments?

Which of the following is not an important question that must be asked when starting a firm? Multiple choice question. How will you manage your everyday financial activities? Which type of operating system should you use for your computers? What long-term investments should you take on? Where will you get the long-term financing to pay for your investment?

Which type of operating system should you use for your computers?

Which of the following companies were involved in corporate scandals that led to Sarbanes-Oxley? Multiple select question. Disney WorldCom Tyco Enron

WorldCom Tyco Enron

Most equity shares of large firms in the U.S. trade on: Multiple choice question. options exchanges commodities markets bond markets organized auction markets

organized auction markets

The goal of the for-profit business is to maximize ----- equity.

owners

Organized auction markets include: Multiple choice question. the NASDAQ mutual funds the New York Stock Exchange exchange traded funds

the New York Stock Exchange

The financial manager acts in the shareholders' best interests by making decisions that increase the value of _____. Multiple choice question. the stock pensions managers' salaries

the stock

The possible goal of profit maximization: Multiple select question. should always be a short-term goal. would probably be the most commonly cited goal for a business. avoids maximizing the sales. can be achieved by cost-cutting.

would probably be the most commonly cited goal for a business. can be achieved by cost-cutting.

What are the two factors that impact whether managers will act in the best interest of stockholders? Multiple choice question. How closely management goals align with stockholder goals and the way managers are compensated Whether SOX is used and to what extent poor employee conduct is reprimanded How closely management is micromanaged and the way managers are compensated How managers are compensated and how much vacation is provided to employees

How closely management goals align with stockholder goals and the way managers are compensated

Which of the following are among the most important questions to be asked when a business is started? Multiple select question. How will everyday financial activities be handled? How much vacation will I be able to take if I own my own business? What long-term investments should be made? Where will long-term financing be obtained to pay for investments?

How will everyday financial activities be handled? What long-term investments should be made? Where will long-term financing be obtained to pay for investments?

Which of the following are true of a sole proprietorship? Multiple select question. It is the simplest type of business to form. A proprietorship has a limited life. It is easy to transfer ownership. A sole proprietor can issue stock to raise capital.

It is the simplest type of business to form. A proprietorship has a limited life.

Corporations in other countries are often called:

Joint stock companies Public limited companies

The EBITDA ratio is similar in spirit to: Multiple choice question. the PE ratio. the quick ratio. inventory turnover. the DuPont Identity.

PE Radio

In addition to the importance of finance for marketing, accounting, and management careers, finance is also now considered a Blank______ discipline, especially at the graduate level. Multiple choice question. PLANT STEM GRET MeGa

STEM

Which of the following, according to the textbook, are possible financial goals for a company? Multiple select question. Survival Minimize costs Maximize profits Incur bankruptcy

Survival Minimize costs Maximize profits

What is the main goal of financial management? Multiple choice question. To maximize current value per share of existing stock To maximize profits To minimize expenses To maximize share of the stock holdings of managers of the company

To maximize current value per share of existing stock

Which of the following positions generally report to the chief financial officer (CFO)? Controller Treasurer CEO Director of Marketing

Treasurer Controller

A -------- corporation is for profit, and has the legal attributes of accountability, transparency, and purpose.

benefit

The five main areas of finance are corporate finance, _____, financial institutions, international finance, and fintech. Multiple choice question. investments credit cards economics loans

investments

Capital budgeting is concerned with planning and managing a firm's _____. Multiple choice question. current liabilities current assets long-term liabilities long-term investments

long-term investments

Because ownership in a corporate is spread over a huge number of shareholders, it can be argued that ---------- effectively controls the firm.

management

The relationship between stockholders and management can best be described as a(n) ______ relationship. Multiple choice question. contradictory mentoring agency irrelevant

agency

Future value is the Blank______ value of an investment at some time in the future. Multiple choice question. relational cash interest indirect

cash

The process of leaving your money and any accumulated interest in an investment for more than one period, thereby reinvesting the interest, is called .

compounding

It is argued that, left to themselves, managers would tend to maximize the amount of resources over which they have control or, more generally, ------power or wealth.

corporate

In financial markets, debt and -------- securities are bought and sold

equity