ASU FIN 300 Exam 1 (Ch 1-4) EXAM
ELABORATIONS QUESTIONS AND VERIFIED
ANSWERS 2026 UPDATE | 100% SOLVED!!
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Terms in this set (125)
Three areas of finance: 1. Financial Management
-buying/selling of assets
-financing choices
-control costs
2. Investments
-purchasing and holding assets & securities
-stocks and bonds
3. Financial Markets
-capital markets
-money markets
-financial intermediaries (banks or credit unions)
Productive assets the long-term tangible and intangible assets a
firm uses to generate cash flows
Tangible = equipment etc.
intangible = patents, trademarks, technical
experience
when purchase productive assets = capital
budgeting
,Financial Managers should make the value of the owner's stock
decisions that maximize
which helps maximize the owner's wealth (the
economic value of the assets the owners
possesses)
Stakeholder anyone other than the owner (stockholder) with a
claim on the cash flows of a firm (employees,
customers, creditors, suppliers, the government)
3 fundamental decisions in financial a. Capital budgeting- which productive assets to
management buy
b. Financing decisions- raising money to buy
more p assets, mainly through selling long term
debt and equity
c. Working capital decisions- involve how firms
manage their current assets and liabilities.
Enough money to pay the bills and any money
left over is invested to earn a return
Capital Budgeting which productive assets the firm should
purchase and how much money the firm can
afford to spend
long term assets on balance sheets/investments/
productive assets both tangible and intangible
, Financing decisions how firms raise cash to pay for their iterm-
55nvestments
ex: productive assets financed by long term
borrowing or equity investment
debt financing - advantage=tax deductable
but increase firms risk because contractual
obligation to make interest payments
equity- has no maturity/guarantee of payments.
long term liability (debt) and equity
Working capital management how to manage the firm's current assets and
decisions current liabilities
day to day management of short term asserts
and liabilities
-mismanagement cause firm to go into
debt/bankruptcy
-profitability affected
Capital structure the mix of debt and equity that is used to finance
a firm
Net working capital the dollar difference between total current assets
and total current liabilities
Capital Markets financial markets where equity and debt
instruments with maturities greater than one year
are traded
ELABORATIONS QUESTIONS AND VERIFIED
ANSWERS 2026 UPDATE | 100% SOLVED!!
Save
Terms in this set (125)
Three areas of finance: 1. Financial Management
-buying/selling of assets
-financing choices
-control costs
2. Investments
-purchasing and holding assets & securities
-stocks and bonds
3. Financial Markets
-capital markets
-money markets
-financial intermediaries (banks or credit unions)
Productive assets the long-term tangible and intangible assets a
firm uses to generate cash flows
Tangible = equipment etc.
intangible = patents, trademarks, technical
experience
when purchase productive assets = capital
budgeting
,Financial Managers should make the value of the owner's stock
decisions that maximize
which helps maximize the owner's wealth (the
economic value of the assets the owners
possesses)
Stakeholder anyone other than the owner (stockholder) with a
claim on the cash flows of a firm (employees,
customers, creditors, suppliers, the government)
3 fundamental decisions in financial a. Capital budgeting- which productive assets to
management buy
b. Financing decisions- raising money to buy
more p assets, mainly through selling long term
debt and equity
c. Working capital decisions- involve how firms
manage their current assets and liabilities.
Enough money to pay the bills and any money
left over is invested to earn a return
Capital Budgeting which productive assets the firm should
purchase and how much money the firm can
afford to spend
long term assets on balance sheets/investments/
productive assets both tangible and intangible
, Financing decisions how firms raise cash to pay for their iterm-
55nvestments
ex: productive assets financed by long term
borrowing or equity investment
debt financing - advantage=tax deductable
but increase firms risk because contractual
obligation to make interest payments
equity- has no maturity/guarantee of payments.
long term liability (debt) and equity
Working capital management how to manage the firm's current assets and
decisions current liabilities
day to day management of short term asserts
and liabilities
-mismanagement cause firm to go into
debt/bankruptcy
-profitability affected
Capital structure the mix of debt and equity that is used to finance
a firm
Net working capital the dollar difference between total current assets
and total current liabilities
Capital Markets financial markets where equity and debt
instruments with maturities greater than one year
are traded
