Finance Final Exam COB 300 JMU
Which financial statement reports a company's capital expenditures during a particular time period?
Statement of Cash Flows
Which form of efficient market asserts that asset prices fully reflect all information, which includes both public and private information?
Strong-form efficient
Which one has double taxation?
C-corp
Dividends are determined by?
Corporations board of directors
The Cash Conversion Cycle
Days sale outstanding + days in inventory - the days payable outstanding
A decrease in a projects cost of capital tends to cause what to increase?
NPV
When evaluating mutually exclusive projects the recommended method of evaluation is?
NPV
Characteristics of a corporation? Owner liability and control?
Owner has limited liability and owner has no operating control
How to calculate tax on sale:
Price sold for - Book value = Gain * Marginal tax rate = Tax on sale
Joe Analyst believes that he can predict the market by trading based on how announced earnings differ from the expected earnings of a company. Joe is counting on the market not being:
Semi-strong efficient
A plastics manufacturing company has decided to decrease inventory turnover from 10 times to 4 times per year. Assuming a constant sales level, which statement is true?
The chance of spoilage increases
The Primary goal of financial management is to maximize?
The market value of owners equity
What would decrease shareholders equity on a corporations Balance Sheet?
The payment of dividends
The NPV investment decision criteria typically assumes that cash flows are reinvested at?
The projects cost of capital
Investors capital is best characterized as?
The sum of the market value of debt and market value of equity
Bond ratings reflect which of the following?
default risk
Which of the following would most likely increase the risk to the bondholder?
inclusion of a call provision
As a company loosens its credit standards the investment in accounts receivable is expected to?
increase
The rate of tax on the next dollar earned is?
marginal tax rate
The risk that diminishes as a portfolio of assets becomes more diversified is best described as:
unsystematic risk.
As a general rule, at the optimal capital structure the:
weighted average cost of capital is minimized.
