FIN320 PRINCIPLES OF FINANCE UNIT 1 MILESTONE 1 QUESTIONS WITH VERIFIED ANSWERS,100%CORRECT

FIN320 PRINCIPLES OF FINANCE UNIT 1 MILESTONE 1 QUESTIONS WITH VERIFIED ANSWERS 27 questions were answered correctly. 1 If equity is $2 million and total revenue is $1.3 million, then ROE is . • incalculable without net profit data • incalculable without EBIT data • 65% • 35% CONCEPT Profitability Ratios 2 Preparing a cash flow forecast helps a company to avoid . • net losses • opportunity costs • liquidity • higher financing costs CONCEPT Building a Cash Budget 3 Capacity planning answers the question " " • How can we be most efficient? • How will we finance it? • How will we decide which direction to go? • What will our revenue be? CONCEPT Financial Forecasting 4 A software company issues shares of stock to the public for the first time in order to raise funds for a planned product expansion. What financial market is the company participating in? • Secondary capital market • Secondary money market • Primary money market • Primary capital market CONCEPT Financial Markets 5 What is a question that should be asked about inventory when forecasting?