FIN 315 105

At the beginning of the year, the long-term debt of a firm was $72,918 and total debt was $138,407. At the end of the year, long-term debt was $68,219 and total debt was $145,838. The interest paid was $6,430. What is the amount of the cash flow to creditors?

$11,129

Which one of the following statements is generally correct?

Auction markets match buy and sell orders.

Which one of the following is included in a firm's market value but yet is excluded from the firm's accounting value?

Good reputation of the company

Which one of the following questions is a working capital management decision?

How much inventory should be on hand for immediate sale?

Working capital management decisions include determining:

the minimum level of cash to be kept in a checking account.

Shareholder A sold 500 shares of ABC stock on the New York Stock Exchange. This transaction:

was facilitated in the secondary market.

At the beginning of the year, a firm had current assets of $121,306 and current liabilities of $124,509. At the end of the year, the current assets were $122,418 and the current liabilities were $103,718. What is the change in net working capital?

$21,903

Jensen Enterprises paid $700 in dividends and $320 in interest this past year. Common stock remained constant at $6,800 and retained earnings decreased by $180. What is the net income for the year?

$520

Which one of the following is a current liability?

Account payable to a supplier that is due next week

Which one of the following terms is defined as the management of a firm's long‐term investments?

Capital budgeting

Which one of the following terms is defined as the mixture of a firm's debt and equity financing?

Capital structure

Which one of the following statements is correct?

Corporations can have an unlimited life.

Which one of the following statements concerning net working capital is correct?

Net working capital may be a negative value.

Which one of the following grants an individual the right to vote on behalf of a shareholder?

Proxy

Public offerings of debt and equity must be registered with the:

Securities and Exchange Commission.

Which one of the following statements concerning stock exchanges is correct?

Some large companies are listed on NASDAQ.

The decision to issue additional shares of stock is an example of:

a capital structure decision.

Which one of the following is the financial statement that shows the accounting value of a firm's equity as of a particular date?

balance sheet

buy and sell at their own risk

dealers

A firm has $680 in inventory, $2,140 in fixed assets, $210 in accounts receivables, $250 in accounts payable, and $80 in cash. What is the amount of the net working capital?

$720

Noncash items refer to:

expenses that do not directly affect cash flows.

A business formed by two or more individuals who each have unlimited liability for all of the firm's business debts is called a:

general partnership.

Capital structure decisions include determining:

how much debt should be assumed to fund a project.

Shareholders' equity:

represents the residual value of a firm.

A business owned by a solitary individual who has unlimited liability for the firm's debt is called a:

sole proprietorship.

The primary advantage of being a limited partner is:

the partner's maximum loss is limited to their capital investment.

When evaluating the timing of a project's projected cash flows, a financial manager is analyzing:

when each cash flow is expected to occur.

An example of a capital budgeting decision is deciding:

whether or not to purchase a new machine for the production line.

A firm's short‐term assets and its short‐term liabilities are referred to as the firm's:

working capital.

Four years ago, Ship Express purchased a mailing machine at a cost of $218,000. This equipment is currently valued at $97,400 on today's balance sheet but could actually be sold for $92,900. This is the only fixed asset the firm owns. Net working capital is $41,300 and long-term debt is $102,800. What is the book value of shareholders' equity?

$35,900

The Widget Co. purchased all of its fixed assets three years ago for $4 million. These assets can be sold today for $2 million. The current balance sheet shows net fixed assets of $2,500,000, current liabilities of $1,375,000, and net working capital of $725,000. If all the current assets were liquidated today, the company would receive $1.9 million in cash. The book value of the total assets today is ________ and the market value of those assets is ________.

$4,600,000; $3,900,000

Hayes Bakery has sales of $30,600, costs of $15,350, an addition to retained earnings of $4,221, dividends paid of $469, interest expense of $1,300, and a tax rate of 21 percent. What is the amount of the depreciation expense?

$8,013.29

You will receive $4,000 at graduation 3 years from now. You plan on investing this money at 5 percent annual interest until you have accumulated $50,000. How many years from today will it be when this occurs?

54.77 years

Which one of the following accounts is the most liquid?

Accounts receivable

Which one of the following is a current asset?

Accounts receivable

Which one of the following questions is least likely to be addressed by financial managers?

How should a product be marketed?

A business created as a distinct legal entity and treated as a legal "person" is called a(n):

corporation.