FIN 325-82 Exam 1 (Ch. 1, 4, 5)

Working Capital

a firm's short-term assets and liabilities

The present value of a lump-sum future amount:

increases as the interest rate decreases.

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

market value of the firm.

What is the goal of financial management?

maximize the current value per share of the existing stock

Capital Structure

the mixture of debt and equity maintained by a firm

Capital Budgeting

the process of planning and managing a firm's long-term investments

Capital budgeting includes the evaluation of which of the following?

Size, timing, and risk of future cash flows

You want to invest $15,000 for 7 years. If you want the largest future value, which of the following options would you choose?

Annual compound interest, 4%

Which one of the following is a capital structure decision?

Establishing the preferred debt-equity level