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BA 323 – NIELANDER 2026 100% PASS
ASSURED EXAMINATION SOLUTIONS
Capital Structure - correct answer- - the
mixture of debt and equity maintained by a
firm
- Two concerns: How much to borrow, least
expensive sources of funds for the firm
Capital Budgeting - correct answer- - the
process of planning and managing a firm's
long-term investments
- Evaluating Time, Size risk of an expenditure
Working Capital Management - correct answer- -
How do we manage the day-to-day finances of
the firm?
- Ensures we have enough resources to continue
operations without interruptions
Order of Financial Management Decisions -
correct answer- 1. Capital Structure
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2. Capital Budgeting
3. Working Capital Management
The Agency Problem - correct answer- - the
possibility of conflict of interest between
the stockholders and management of a firm
Two ways to fix the problem: Managerial
compensation is tied to stock value, Control
of the firm the stockholders can get rid of
management through a "proxy fight"
Sarbanes-Oxley Act - correct answer- - Driven
by Corporate Scandals
- Intended to strengthen protection against
accounting fraud
Operating Cash Flow - correct answer- - cash
generated from a firm's normal business
activities, tells us if inflows cover outflows
- Equation: EBIT + Dep - Taxes
cash flow from assets - correct answer- -
total of cash flow to creditors and
stockholders, consisting of: operating cash
BA 323 – NIELANDER 2026 100% PASS
ASSURED EXAMINATION SOLUTIONS
Capital Structure - correct answer- - the
mixture of debt and equity maintained by a
firm
- Two concerns: How much to borrow, least
expensive sources of funds for the firm
Capital Budgeting - correct answer- - the
process of planning and managing a firm's
long-term investments
- Evaluating Time, Size risk of an expenditure
Working Capital Management - correct answer- -
How do we manage the day-to-day finances of
the firm?
- Ensures we have enough resources to continue
operations without interruptions
Order of Financial Management Decisions -
correct answer- 1. Capital Structure
, 2 | Page
2. Capital Budgeting
3. Working Capital Management
The Agency Problem - correct answer- - the
possibility of conflict of interest between
the stockholders and management of a firm
Two ways to fix the problem: Managerial
compensation is tied to stock value, Control
of the firm the stockholders can get rid of
management through a "proxy fight"
Sarbanes-Oxley Act - correct answer- - Driven
by Corporate Scandals
- Intended to strengthen protection against
accounting fraud
Operating Cash Flow - correct answer- - cash
generated from a firm's normal business
activities, tells us if inflows cover outflows
- Equation: EBIT + Dep - Taxes
cash flow from assets - correct answer- -
total of cash flow to creditors and
stockholders, consisting of: operating cash
