FIN 2164 FINAL EXAM WITH CORRECT
ACTUAL QUESTIONS AND CORRECTLY
WELL DEFINED ANSWERS LATEST
ALREADY GRADED A+
1. What is the primary goal of financial management?
A. Maximize employee satisfaction
B. Maximize shareholder wealth
C. Maximize sales revenue
D. Minimize taxes
Answer: B
Explanation: Financial management focuses on increasing
shareholder wealth through maximizing stock value.
2. Which financial statement shows a company’s financial
position at a point in time?
A. Income statement
,B. Cash flow statement
C. Balance sheet
D. Statement of equity
Answer: C
Explanation: The balance sheet shows assets, liabilities, and
equity at a specific date.
3. What does liquidity measure?
A. Profitability
B. Ability to meet short-term obligations
C. Long-term debt capacity
D. Market value
Answer: B
Explanation: Liquidity indicates how easily a firm can pay
short-term debts.
4. Net present value (NPV) is:
,A. Future value minus taxes
B. Present value of inflows minus outflows
C. Accounting profit
D. Total revenue
Answer: B
Explanation: NPV compares present value of cash inflows
and outflows.
5. A positive NPV means:
A. Project should be rejected
B. Project breaks even
C. Project adds value
D. Project has no risk
Answer: C
Explanation: Positive NPV increases shareholder wealth.
6. What is the discount rate used in capital budgeting
called?
, A. Inflation rate
B. Cost of capital
C. Tax rate
D. Dividend rate
Answer: B
Explanation: Cost of capital is used to discount future cash
flows.
7. Which risk cannot be eliminated through diversification?
A. Firm-specific risk
B. Unsystematic risk
C. Diversifiable risk
D. Systematic risk
Answer: D
Explanation: Systematic risk affects the entire market.
8. The formula for simple interest is:
ACTUAL QUESTIONS AND CORRECTLY
WELL DEFINED ANSWERS LATEST
ALREADY GRADED A+
1. What is the primary goal of financial management?
A. Maximize employee satisfaction
B. Maximize shareholder wealth
C. Maximize sales revenue
D. Minimize taxes
Answer: B
Explanation: Financial management focuses on increasing
shareholder wealth through maximizing stock value.
2. Which financial statement shows a company’s financial
position at a point in time?
A. Income statement
,B. Cash flow statement
C. Balance sheet
D. Statement of equity
Answer: C
Explanation: The balance sheet shows assets, liabilities, and
equity at a specific date.
3. What does liquidity measure?
A. Profitability
B. Ability to meet short-term obligations
C. Long-term debt capacity
D. Market value
Answer: B
Explanation: Liquidity indicates how easily a firm can pay
short-term debts.
4. Net present value (NPV) is:
,A. Future value minus taxes
B. Present value of inflows minus outflows
C. Accounting profit
D. Total revenue
Answer: B
Explanation: NPV compares present value of cash inflows
and outflows.
5. A positive NPV means:
A. Project should be rejected
B. Project breaks even
C. Project adds value
D. Project has no risk
Answer: C
Explanation: Positive NPV increases shareholder wealth.
6. What is the discount rate used in capital budgeting
called?
, A. Inflation rate
B. Cost of capital
C. Tax rate
D. Dividend rate
Answer: B
Explanation: Cost of capital is used to discount future cash
flows.
7. Which risk cannot be eliminated through diversification?
A. Firm-specific risk
B. Unsystematic risk
C. Diversifiable risk
D. Systematic risk
Answer: D
Explanation: Systematic risk affects the entire market.
8. The formula for simple interest is:
