corporate finance chapter 1 and 2 homework questions

which one of the following accounts in the most liquid?

accounts receivable

which one of the following best illustrates that the management of a firm is adhering to the goal of financial management?

an increase in the market value per share

which one of the following is a current liability?

an invoice payable to a supplier in 45 days

which of the following parties are not considered stakeholders of a firm?

competitors

net working capital is defined as:

current assets minus current liabilities

cash flow to stockholders is defined as:

dividend payments less net new equity raised

shareholders' equity

represents the residual value of a firm

a sole proprietorship

requires the owner to be personally responsible for all the company's debts

Shen Systems purchased equipment four years ago at a cost of $218,000. The equipment is 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

Mikeska Equipment Repair has net working capital of $560. Long-term debt is $3,970, total assets are $7,390, and fixed assets are $3,910. What is the amount of the total liabilities?

$6890

The balance sheet of Perez Printing shows $680 in inventory, $2,140 in fixed assets, $210 in accounts receivables, $250 in accounts payable, and $80 in cash. How much net working capital does the company have?

$720

Vasquez Pottery has shareholders' equity of $218,700. The firm owes a total of $141,000, only 40 percent of which is payable within the next 12 months. The firm has net fixed assets of $209,800. What is the amount of the net working capital?

$93,500

Cookies by Casey has sales of $487,000 with costs of $263,000. Interest expense is $26,000 and depreciation is $42,000. The tax rate is 21 percent. What is the net income?

123,240

deciding which long-term investment a firm should make is a blank decision?

capital budgeting

a firm's mixture of debt and equity financing is the result of its blank decisions

capital structure

determining the number of shares of stock to issue is an example of blank decision

capital structure

the cash flow that is available for distribution to a corporation's creditors and stockholders is called the:

cash flow from assets

which one of the following is a disadvantage of the corporate form of business?

distributed profits may experience double taxation

which one of the following questions involves a capital structure decision?

how much debt should the firm incur to fund a project?

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

how much inventory should the company keep on hand?

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

in which region of the country should a new product be launched?

which one of the following actions by a financial manager is most apt to create an agency problem?

increasing current profits when doing so lowers the value of the company's equity

which one of the following is classified as a current asset?

inventory

the cash flow that results from a company's ongoing, normal business activities is called:

operating cash flow

which one of the following primary market transaction

sale of a new share of stock from a corporation to an individual investor

financial managers should primarily focus on the interests of:

shareholders

ultimately the blank controls the corporation

shareholders

which one of the following questions involves a capital budgeting decision?

should the firm purchase a new machine for the production line?

which one of the following involves a working capital management decision?

what is the maximum level of cash to be kept in the firm's bank account?