FIN 571 Final Exam Latest
Question
1. The costs of avoiding a bankruptcy filing by a financially distressed firm are classified as
_____ costs
A. flotation
B. direct bankruptcy
C. indirect bankruptcy
D. financial solvency
E. capital structure
2. Which one of the following is an example of a nondiversifiable risk?
A. a well respected president of a firm suddenly resigns
B. a well respected chairman of the Federal Reserve suddenly resigns
C. a key employee of a firm suddenly resigns and accepts employment with a key competitor
D. a well managed firm reduces its work force and automates several jobs
E. a poorly managed firm suddenly goes out of business due to lack of sales
3. A project has an initial cost of $2,250. The cash inflows are $0, $500, $900, and $700 for
Years 1 to 4, respectively. What is the payback period?
A. 2.97 years
B. 3.92 years
C. never
D. 2.84 years
E. 3.98 years
Question
1. The costs of avoiding a bankruptcy filing by a financially distressed firm are classified as
_____ costs
A. flotation
B. direct bankruptcy
C. indirect bankruptcy
D. financial solvency
E. capital structure
2. Which one of the following is an example of a nondiversifiable risk?
A. a well respected president of a firm suddenly resigns
B. a well respected chairman of the Federal Reserve suddenly resigns
C. a key employee of a firm suddenly resigns and accepts employment with a key competitor
D. a well managed firm reduces its work force and automates several jobs
E. a poorly managed firm suddenly goes out of business due to lack of sales
3. A project has an initial cost of $2,250. The cash inflows are $0, $500, $900, and $700 for
Years 1 to 4, respectively. What is the payback period?
A. 2.97 years
B. 3.92 years
C. never
D. 2.84 years
E. 3.98 years
