Business finance chapter 1 & 2

Uptown Markets is financed with 45 percent debt and 55 percent equity. This mixture of debt and equity is referred to as the firm's:

capital structure

Net working capital is defined as:

current assets minus current liabilities

Donut Delite has total assets of $31,300, long-term debt of $8,600, net fixed assets of $19,300, and owners' equity of $21,100. What is the value of the net working capital?

10,400

Last year, The Pizza Joint added $4,100 to retained earnings from sales of $93,600. The company had costs of $74,400, dividends of $2,500, and interest paid of $1,400. The tax rate was 34 percent. What was the amount of the depreciation expense?

2,503

Which one of the following terms is defined as the total tax paid divided by the total taxable income?

average tax rate

one advantage of the corporate firm of organization is the:

ability to raise larger sums of equity capital than other organizational forms

The shareholders of Weil's Markets would benefit if the firm were to be acquired by Better Foods. However, Weil's board of directors rejects the acquisition offer. This is an example of:

an agency conflict

The financial statement that summarizes a firms accouting values as of a particular date is called the:

balance sheet

Cash flow from assets is defined as:

operating cash flow minus the change in net working capital minus net capital spending.

which of the following is a working capital decision?

how much cash should the firm keep in reserve

The accounting statement that measures the revenues, expenses & net income of a firm over a period of time is called:

income statement

which one of the following best describes the primary intent of the Sarbanes-Oxley act of 2002?

increase the protections against corporate fraud

Matt and Alicia created a firm that is a separate legal entity and will share ownership of that firm on a 75/25 basis. Which type of entity did they create if they have no personal liability for the firm's debts?

limited partnership

which one of the following forms of business organization offers liability protection to some of its owners but not all of its owners?

limited partnership

Given a profitable firm, depreciation:

lowers taxes

the primary goal of financial management is most associated with increasing the:

market value of the firm

Which one of these is correct?

net income is distributed either to dividends or retained earnings

The market value:

of an asset tends to provide a better guide to actual worth of that asset than the book value does

You contacted your stock broker this morning and placed an order to sell 300 shares of a stock that trades on the NYSE. This sale will occur in the:

secondary market

capital budgeting includes the evaluation of which of the following?

size, timing and risk of future cash flows