A+ Graded Paper
BUSI 320 – Corporate Finance Final | CPA-Style
Problems Professor-Based Questions & Full
Solutions – Graded A
Questions and Mark scheme
Version: Final 1.1
,generated when a service has been provided and payment has not yet been received - ✔✔accused expense ( which is
short term)
market value is of primary concern to - ✔✔financial manager, securities analyst, stockholders
stmt of cash flows represents cash or cash equivalent items that are easily convertible to cash in how many days - ✔✔90
matching of revenues and expenses in the period in which they occur to appropriately measure profits - ✔✔accrual
method
every item on income stmt adjusted from cccrual to cash accounting - ✔✔direct method
net income represents starting point adjustments are made to convert income ( more popular method) - ✔✔indirect
method
financial activities apply to the sale or retirement of - ✔✔bonds, common and preferred stock, other corporate
securities, payment of cash dividends
sale of firms sureties if a (use or source) of funds in cash flows for financing activities stmt of cash flows - ✔✔source
payment of dividends and repurchase of securities is (use or source) of funds stmt of cash flows - ✔✔use
is a non cash expense, not a new source of funds, represents an attempt to allocate initial cost of asset over useful life -
✔✔depreciation
maintains productive capacity of firm - ✔✔capital expenditures
maintains necessary payout on common stock and covers preferred stock obligations - ✔✔dividends
indicates expectations about the future of the comapny - ✔✔p/e ratio
, ____ represents the funds that are available for special financing activities, such as a leveraged buyout - ✔✔Free cash
flow
provides a meaningful comparison of a company to its industry - ✔✔ratio analysis
ratio can measure 4 things - ✔✔profitability, asset utilization, liquidity, and debt utilization
identifies the true sources of return on assets and return to stockholders - ✔✔The Du Pont system
shows company's performance over time or number of years against industry averages - ✔✔trend analysis
are used to weigh and evaluate operating performance of firm/ measured in relation to other values - ✔✔financial ratios
measures firms ability to earn adequate returns - ✔✔profitability ratios
measure speed at which firm turns over - ✔✔asset utilization ratios
emphasize firms ability to pay off short-term obligations as they come due - ✔✔liquidity ratios
estimate overall debt position of firm - ✔✔debt utilization ratios
primary consideration for potential investors and security analysts regarding ratios - ✔✔profitability ratios and then
liquidity and debt utilization
finance integrates concepts of - ✔✔economics and accounting
the relationship of ______ is a central focus of finance - ✔✔risk to return
financial capital (money) is used to purchase - ✔✔real capital (long-term plant and equipment)
new financial products focus on ... - ✔✔hedging
BUSI 320 – Corporate Finance Final | CPA-Style
Problems Professor-Based Questions & Full
Solutions – Graded A
Questions and Mark scheme
Version: Final 1.1
,generated when a service has been provided and payment has not yet been received - ✔✔accused expense ( which is
short term)
market value is of primary concern to - ✔✔financial manager, securities analyst, stockholders
stmt of cash flows represents cash or cash equivalent items that are easily convertible to cash in how many days - ✔✔90
matching of revenues and expenses in the period in which they occur to appropriately measure profits - ✔✔accrual
method
every item on income stmt adjusted from cccrual to cash accounting - ✔✔direct method
net income represents starting point adjustments are made to convert income ( more popular method) - ✔✔indirect
method
financial activities apply to the sale or retirement of - ✔✔bonds, common and preferred stock, other corporate
securities, payment of cash dividends
sale of firms sureties if a (use or source) of funds in cash flows for financing activities stmt of cash flows - ✔✔source
payment of dividends and repurchase of securities is (use or source) of funds stmt of cash flows - ✔✔use
is a non cash expense, not a new source of funds, represents an attempt to allocate initial cost of asset over useful life -
✔✔depreciation
maintains productive capacity of firm - ✔✔capital expenditures
maintains necessary payout on common stock and covers preferred stock obligations - ✔✔dividends
indicates expectations about the future of the comapny - ✔✔p/e ratio
, ____ represents the funds that are available for special financing activities, such as a leveraged buyout - ✔✔Free cash
flow
provides a meaningful comparison of a company to its industry - ✔✔ratio analysis
ratio can measure 4 things - ✔✔profitability, asset utilization, liquidity, and debt utilization
identifies the true sources of return on assets and return to stockholders - ✔✔The Du Pont system
shows company's performance over time or number of years against industry averages - ✔✔trend analysis
are used to weigh and evaluate operating performance of firm/ measured in relation to other values - ✔✔financial ratios
measures firms ability to earn adequate returns - ✔✔profitability ratios
measure speed at which firm turns over - ✔✔asset utilization ratios
emphasize firms ability to pay off short-term obligations as they come due - ✔✔liquidity ratios
estimate overall debt position of firm - ✔✔debt utilization ratios
primary consideration for potential investors and security analysts regarding ratios - ✔✔profitability ratios and then
liquidity and debt utilization
finance integrates concepts of - ✔✔economics and accounting
the relationship of ______ is a central focus of finance - ✔✔risk to return
financial capital (money) is used to purchase - ✔✔real capital (long-term plant and equipment)
new financial products focus on ... - ✔✔hedging
