2
Finance 5320 Exam 1 study questions with accurate || || || || || || || ||
detailed answers ||
A firm's capital structure refers to the firm's: - ✔✔proportions of financing from current and long-
|| || || || || || || || || || || || || || ||
term debt and equity. || || ||
The process of planning and managing a firm's long-term assets is called - ✔✔capital budgeting.
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Which one of these characteristics best describes the primary advantage of being a limited partner
|| || || || || || || || || || || || || || ||
rather than a general partner? - ✔✔Personal financial liability limited to the capital invested
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Which statement concerning corporations is correct? - ✔✔The entity can outlive all of its initial
|| || || || || || || || || || || || || || ||
owners.
One intent of the Sarbanes Oxley Act of 2002 is to - ✔✔protect investors from corporate abuses.
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A stakeholder is any person or entity: - ✔✔other than a stockholder or creditor who potentially
|| || || || || || || || || || || || || || || ||
has a financial interest in a firm.
|| || || || || ||
Which one of these best fits the description of an agency cost? - ✔✔The payment required for an
|| || || || || || || || || || || || || || || || || ||
outside audit of the firm || || || ||
The ultimate control of a corporation lies in the hands of the corporate: - ✔✔stockholders.
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Which one of these represents the best means of increasing current shareholder value? -
|| || || || || || || || || || || || || ||
✔✔Increasing the current value of the overall firm || || || || || || ||
JJ's has net sales of $48,920, depreciation of $711, cost of goods sold of $31,890, administrative
|| || || || || || || || || || || || || || || ||
costs of $11,210, interest expense of $680, dividends paid of $450, and taxes of $974. What is the
|| || || || || || || || || || || || || || || || || ||
, 2
cash flow from operations as it will appear on the accounting statement of cash flows if the firm
|| || || || || || || || || || || || || || || || || ||
spent $274 on net working capital? - ✔✔Subtract everything except for depreciation & Dividends
|| || || || || || || || || || || || ||
$3,892
Quick Marts increased its cash by $418 this year. The firm's statement of cash flows shows total
|| || || || || || || || || || || || || || || || ||
cash flow from financing activities of $246 and total cash flow from investing activities of −$184.
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What is the total cash flow from operations on this accounting statement? - ✔✔$356
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Last year, Webster Farms had annual revenue of $87,200, depreciation of $11,600, cost of goods
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sold of $54,700, and administrative expenses of $8,300. The firm paid $3,200 in dividends and
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paid taxes of $2,646. What was the operating cash flow? - ✔✔$21554
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During the year, Lasko's repaid $12,500 in long-term debt, borrowed $8,400, paid $611 in interest
|| || || || || || || || || || || || || || ||
and $740 in dividends, and had an operating cash flow of $16,207. The firm acquired $33,500 in
|| || || || || || || || || || || || || || || || ||
new fixed assets and sold $8,400 of old assets. Net working capital declined by $1,592 during the
|| || || || || || || || || || || || || || || || ||
year. What is the annual cash flow to stockholders? - ✔✔-$12012
|| || || || || || || || || ||
JK Meadows has beginning current liabilities of $14,602 and total liabilities of $35,418. At the
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end of the year, the current liabilities are $15,311 and the total liabilities are $37,604. During the
|| || || || || || || || || || || || || || || || ||
year, the firm paid $680 in dividends and $1,320 in interest. What is the cash flow to creditors? -
|| || || || || || || || || || || || || || || || || || ||
✔✔-$157
Which one of the following is a current liability? - ✔✔Note payable in nine months
|| || || || || || || || || || || || || ||
Which one of the following statements concerning liquidity is correct? - ✔✔Balance sheet
|| || || || || || || || || || || || ||
accounts are listed in order of decreasing liquidity. || || || || || || ||
Delfinio's has total revenues of $4,315, selling and administrative expenses of $611, depreciation
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of $309, cost of goods sold of $2,403, taxes of $178, dividends of $80, and interest expense of
|| || || || || || || || || || || || || || || || || ||
$168. What is the amount of the non-cash items? - ✔✔$309
|| || || || || || || || || ||
Finance 5320 Exam 1 study questions with accurate || || || || || || || ||
detailed answers ||
A firm's capital structure refers to the firm's: - ✔✔proportions of financing from current and long-
|| || || || || || || || || || || || || || ||
term debt and equity. || || ||
The process of planning and managing a firm's long-term assets is called - ✔✔capital budgeting.
|| || || || || || || || || || || || || ||
Which one of these characteristics best describes the primary advantage of being a limited partner
|| || || || || || || || || || || || || || ||
rather than a general partner? - ✔✔Personal financial liability limited to the capital invested
|| || || || || || || || || || || || ||
Which statement concerning corporations is correct? - ✔✔The entity can outlive all of its initial
|| || || || || || || || || || || || || || ||
owners.
One intent of the Sarbanes Oxley Act of 2002 is to - ✔✔protect investors from corporate abuses.
|| || || || || || || || || || || || || || || ||
A stakeholder is any person or entity: - ✔✔other than a stockholder or creditor who potentially
|| || || || || || || || || || || || || || || ||
has a financial interest in a firm.
|| || || || || ||
Which one of these best fits the description of an agency cost? - ✔✔The payment required for an
|| || || || || || || || || || || || || || || || || ||
outside audit of the firm || || || ||
The ultimate control of a corporation lies in the hands of the corporate: - ✔✔stockholders.
|| || || || || || || || || || || || || ||
Which one of these represents the best means of increasing current shareholder value? -
|| || || || || || || || || || || || || ||
✔✔Increasing the current value of the overall firm || || || || || || ||
JJ's has net sales of $48,920, depreciation of $711, cost of goods sold of $31,890, administrative
|| || || || || || || || || || || || || || || ||
costs of $11,210, interest expense of $680, dividends paid of $450, and taxes of $974. What is the
|| || || || || || || || || || || || || || || || || ||
, 2
cash flow from operations as it will appear on the accounting statement of cash flows if the firm
|| || || || || || || || || || || || || || || || || ||
spent $274 on net working capital? - ✔✔Subtract everything except for depreciation & Dividends
|| || || || || || || || || || || || ||
$3,892
Quick Marts increased its cash by $418 this year. The firm's statement of cash flows shows total
|| || || || || || || || || || || || || || || || ||
cash flow from financing activities of $246 and total cash flow from investing activities of −$184.
|| || || || || || || || || || || || || || ||
What is the total cash flow from operations on this accounting statement? - ✔✔$356
|| || || || || || || || || || || || || ||
Last year, Webster Farms had annual revenue of $87,200, depreciation of $11,600, cost of goods
|| || || || || || || || || || || || || || ||
sold of $54,700, and administrative expenses of $8,300. The firm paid $3,200 in dividends and
|| || || || || || || || || || || || || || ||
paid taxes of $2,646. What was the operating cash flow? - ✔✔$21554
|| || || || || || || || || || ||
During the year, Lasko's repaid $12,500 in long-term debt, borrowed $8,400, paid $611 in interest
|| || || || || || || || || || || || || || ||
and $740 in dividends, and had an operating cash flow of $16,207. The firm acquired $33,500 in
|| || || || || || || || || || || || || || || || ||
new fixed assets and sold $8,400 of old assets. Net working capital declined by $1,592 during the
|| || || || || || || || || || || || || || || || ||
year. What is the annual cash flow to stockholders? - ✔✔-$12012
|| || || || || || || || || ||
JK Meadows has beginning current liabilities of $14,602 and total liabilities of $35,418. At the
|| || || || || || || || || || || || || || ||
end of the year, the current liabilities are $15,311 and the total liabilities are $37,604. During the
|| || || || || || || || || || || || || || || || ||
year, the firm paid $680 in dividends and $1,320 in interest. What is the cash flow to creditors? -
|| || || || || || || || || || || || || || || || || || ||
✔✔-$157
Which one of the following is a current liability? - ✔✔Note payable in nine months
|| || || || || || || || || || || || || ||
Which one of the following statements concerning liquidity is correct? - ✔✔Balance sheet
|| || || || || || || || || || || || ||
accounts are listed in order of decreasing liquidity. || || || || || || ||
Delfinio's has total revenues of $4,315, selling and administrative expenses of $611, depreciation
|| || || || || || || || || || || || ||
of $309, cost of goods sold of $2,403, taxes of $178, dividends of $80, and interest expense of
|| || || || || || || || || || || || || || || || || ||
$168. What is the amount of the non-cash items? - ✔✔$309
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