FI 3300 Exam 1 with 100% Correct
Answers
The study of the creation and management of wealth. How investors, financial
institutions, and company executives manage money in order to make money. - ANS-
Finance
Studies the determinants of interest rates, the regulation of financial institutions, and the
structure and function of various financial markets - ANS-Financial markets and
Institutions
How individuals and financial institutions make decisions concerning the allocation of
securities within their investment portfolios. The determination and management of risk -
ANS-Investments
Financial management of a business enterprise - ANS-Corporate Financial
Management
Purchase financial assets (Lend money) to earn an expected return - ANS-What
investors do
Business that is 100% owned and often operated by a single individual.
Pros:
-Easy to start
-Fewer govt regulations
Cons:
-Difficult to raise large amounts of capital
-Personal liability to business debt - ANS-Sole Proprietorship
Essentially like a Sole P, except owned+operated by two or more individuals.
Pros:
-Multiple partners can contribute more capital than SP
-Easy to start
-Few govt regulations
Cons:
-Unlimited personal liability
-Difficult Transfer of ownership - ANS-Partnership
, Legal entity, separate from the owner.
Pros:
-Limited liability
-Ability to raise large capital
-Easy transfer of ownership
Cons:
-Heavy govt regulation
-Costly to establish - ANS-Corporation
to create value for stockholders (aka the owners of the corp) whose goal is to make
money - ANS-The goal of corporations
Represented by the price of the company's common stock - ANS-The value of a
company to a stockholder
Corporate Financial management - ANS-Broadest subject matter in finance
These transfers occur in a financial market or through a financial institution - ANS-
Where the transfer of funds from investors to businesses take place
(Purchase price-Salvage value)/estimated useful life - ANS-Calculate Depreciation
Matches the company's revenues with expenses over a period of time - ANS-Income
Statement
Revenue-Expenses - ANS-Calculate profit/loss
Net sales or revenue-COGS - ANS-Calculate Gross Profit
Gross profit-Operating expenses-depreciation expense - ANS-Calculate operating
profit/Earnings Before Interest and Taxes
Operating Profit(EBIT)-Interest Expense - ANS-Calculate Profit Before Taxes/Earnings
Before Taxes
Profit before taxes-Taxes - ANS-Calculate Net Income
Gross Sales-Returns and Allowances - ANS-Net Sales
The direct costs incurred on a product
number of units sold*cost per unit - ANS-Cost of Goods Sold
Answers
The study of the creation and management of wealth. How investors, financial
institutions, and company executives manage money in order to make money. - ANS-
Finance
Studies the determinants of interest rates, the regulation of financial institutions, and the
structure and function of various financial markets - ANS-Financial markets and
Institutions
How individuals and financial institutions make decisions concerning the allocation of
securities within their investment portfolios. The determination and management of risk -
ANS-Investments
Financial management of a business enterprise - ANS-Corporate Financial
Management
Purchase financial assets (Lend money) to earn an expected return - ANS-What
investors do
Business that is 100% owned and often operated by a single individual.
Pros:
-Easy to start
-Fewer govt regulations
Cons:
-Difficult to raise large amounts of capital
-Personal liability to business debt - ANS-Sole Proprietorship
Essentially like a Sole P, except owned+operated by two or more individuals.
Pros:
-Multiple partners can contribute more capital than SP
-Easy to start
-Few govt regulations
Cons:
-Unlimited personal liability
-Difficult Transfer of ownership - ANS-Partnership
, Legal entity, separate from the owner.
Pros:
-Limited liability
-Ability to raise large capital
-Easy transfer of ownership
Cons:
-Heavy govt regulation
-Costly to establish - ANS-Corporation
to create value for stockholders (aka the owners of the corp) whose goal is to make
money - ANS-The goal of corporations
Represented by the price of the company's common stock - ANS-The value of a
company to a stockholder
Corporate Financial management - ANS-Broadest subject matter in finance
These transfers occur in a financial market or through a financial institution - ANS-
Where the transfer of funds from investors to businesses take place
(Purchase price-Salvage value)/estimated useful life - ANS-Calculate Depreciation
Matches the company's revenues with expenses over a period of time - ANS-Income
Statement
Revenue-Expenses - ANS-Calculate profit/loss
Net sales or revenue-COGS - ANS-Calculate Gross Profit
Gross profit-Operating expenses-depreciation expense - ANS-Calculate operating
profit/Earnings Before Interest and Taxes
Operating Profit(EBIT)-Interest Expense - ANS-Calculate Profit Before Taxes/Earnings
Before Taxes
Profit before taxes-Taxes - ANS-Calculate Net Income
Gross Sales-Returns and Allowances - ANS-Net Sales
The direct costs incurred on a product
number of units sold*cost per unit - ANS-Cost of Goods Sold
