Finance MBA Questions With All Correct Answers
State and Local Government Bonds correct answer -Issued by nonfederal
government entities, these financial instruments are debt securities that fund
their capital expenditures. They are exempt from most taxes imposed in the
area where the securities are issued.
Leases correct answer -These financial instruments are contractual
agreements that give one party a long-term agreement to use an asset by
providing regular payments.
Commercial Paper correct answer -Issued by corporations, these
unsecured debt instruments are used to fund corporate short-term financing
requirements. If issued by a financially strong company, they have less risk.
FCF correct answer -[EBIT (1-T) + depreciation & amortization] - [capital
expenditures...(FixedAssets) + change in net operating working capital]
EBIT correct answer -earnings before interest and taxes
derivative correct answer -A financial instrument whose value is derived
from the value of an underlying asset is called a_________
Treasury bills, certificates of deposit correct answer -Which of the
following are money market instruments? Check all that apply.
Common stocks
Long-term bank loans
Treasury bills
Certificates of deposit
Preferred stocks
no correct answer -is negative free cash flow always a bad sign?
market values correct answer -accounting statements insufficient for
evaluting managers' performance because they do not reflect __________________
MVA correct answer -Diffrenece between market value and book value of a
firm's common equity ....(Po x Number of shares)- Book value equity
, EVA correct answer -Estimate of a business' true economic profit for a
given year
MVA correct answer -market value added
EVA correct answer -Economic Value Added
EVA correct answer -EBIT (1-T) - (Total invested capital x cost of capital)
Book value correct answer -Total equity =
GAAP correct answer -Generally Accepted Accounting Principles
Internal Users correct answer -Managerial Accounting reports only
provided to _______________________i
Looks backwards forever correct answer -Balance sheets
looks at a period of time correct answer -Income Statement & Cash flow
Expense correct answer -Cost incurred to generate revenue
Revenue correct answer -Money made while doing businesses main
activity purpose.
US Treasury Bills correct answer -Backed by the U.S. government, these
financial instruments are short-term debt obligations with a maturity of less
than one year. They are considered risk-free investments.U.S. Treasury bills
Certificates of Deposit correct answer -Issued by money-centered financial
firms, these short- or medium-term insured debt instruments pay higher
interest than a regular savings account. They are low-risk instruments and
have low returns.
money market mutual fund correct answer -These financial instruments
are investment pools that buy such short-term debt instruments as Treasury
bills (T-bills), certificates of deposit (CDs), and commercial paper. They can be
easily liquidated.
State and Local Government Bonds correct answer -Issued by nonfederal
government entities, these financial instruments are debt securities that fund
their capital expenditures. They are exempt from most taxes imposed in the
area where the securities are issued.
Leases correct answer -These financial instruments are contractual
agreements that give one party a long-term agreement to use an asset by
providing regular payments.
Commercial Paper correct answer -Issued by corporations, these
unsecured debt instruments are used to fund corporate short-term financing
requirements. If issued by a financially strong company, they have less risk.
FCF correct answer -[EBIT (1-T) + depreciation & amortization] - [capital
expenditures...(FixedAssets) + change in net operating working capital]
EBIT correct answer -earnings before interest and taxes
derivative correct answer -A financial instrument whose value is derived
from the value of an underlying asset is called a_________
Treasury bills, certificates of deposit correct answer -Which of the
following are money market instruments? Check all that apply.
Common stocks
Long-term bank loans
Treasury bills
Certificates of deposit
Preferred stocks
no correct answer -is negative free cash flow always a bad sign?
market values correct answer -accounting statements insufficient for
evaluting managers' performance because they do not reflect __________________
MVA correct answer -Diffrenece between market value and book value of a
firm's common equity ....(Po x Number of shares)- Book value equity
, EVA correct answer -Estimate of a business' true economic profit for a
given year
MVA correct answer -market value added
EVA correct answer -Economic Value Added
EVA correct answer -EBIT (1-T) - (Total invested capital x cost of capital)
Book value correct answer -Total equity =
GAAP correct answer -Generally Accepted Accounting Principles
Internal Users correct answer -Managerial Accounting reports only
provided to _______________________i
Looks backwards forever correct answer -Balance sheets
looks at a period of time correct answer -Income Statement & Cash flow
Expense correct answer -Cost incurred to generate revenue
Revenue correct answer -Money made while doing businesses main
activity purpose.
US Treasury Bills correct answer -Backed by the U.S. government, these
financial instruments are short-term debt obligations with a maturity of less
than one year. They are considered risk-free investments.U.S. Treasury bills
Certificates of Deposit correct answer -Issued by money-centered financial
firms, these short- or medium-term insured debt instruments pay higher
interest than a regular savings account. They are low-risk instruments and
have low returns.
money market mutual fund correct answer -These financial instruments
are investment pools that buy such short-term debt instruments as Treasury
bills (T-bills), certificates of deposit (CDs), and commercial paper. They can be
easily liquidated.
