Peregrine Finance || with Complete Solution.
The firm's are primarily interested in ratios that measure the short-term liquidity of the company
and its ability to make principal and interest payments. correct answers Creditors
A company's balance sheet shows the value of assets, liabilities, and stockholders' equity correct
answers At a specific point in time
A firm that employs an aggressive strategy to finance assets correct answers Will finance a
portion of long-term (permanent) growth in assets with short-term financing
Which of the following is NOT an example of a financial asset? correct answers Property, plant,
and equipment
Which of the following statements is correct? correct answers The incremental operating cash
flow for capital budgeting includes return on invested capital, which is net income, and return of
part of invested capital, which is depreciation
The bottom-up method for forecasting sales correct answers Relies on the ability of sales
personnel to assess future demand, usually without the aid of statistical models
A(n) ________ is generally obtained from a bank or insurance company and the borrower agrees
to make a series of payments consisting of interest and principal correct answers term loan
Which of the following statements is most correct? correct answers If the maturity risk premium
were zero and the rate of inflation were expected to increase in the future, then the yield curve
for U.S. Treasury securities would, other things held constant, have an upward slope
The premium is compensation for the possibility that the borrower will not be able to pay the
debt's interest and principal on time correct answers default risk
, Your uncle would like to restrict his interest rate risk and his default risk, but he still would like
to invest in corporate bonds. Which of the possible bonds listed below satisfies your uncle's
criteria? correct answers AAA bond with 5 years to maturity
An American Depository Receipt (ADR) represents correct answers Certificates representing
ownership in stocks of foreign companies that are held in trust by a bank located in the country
the stock is traded
Which of the following is not an example of a financial asset? correct answers Inventory
A cash budget is correct answers A statement of a firm's planned inflows and outflows of cash
used to ensure that a firm has available cash to meet short-term financial obligations
The preemptive right is important to shareholders because it correct answers Protects the current
shareholders against dilution of ownership interests
Which of the following rules are essential to successful cash flow estimates, and ultimately, to
successful capital budgeting? correct answers Only incremental cash flows are relevant to the
accept/ reject decision
A protective feature on preferred stock that requires preferred dividends previously not paid to be
disbursed before any common stock dividends can be paid is called what? correct answers
Cumulative dividends
During recessions the demand for funds typically correct answers decreases
Bond ratings of and higher are considered to be investment grade bonds. correct answers BBB
are often used as the plug figure in pro forma projections correct answers cash balances
The firm's are primarily interested in ratios that measure the short-term liquidity of the company
and its ability to make principal and interest payments. correct answers Creditors
A company's balance sheet shows the value of assets, liabilities, and stockholders' equity correct
answers At a specific point in time
A firm that employs an aggressive strategy to finance assets correct answers Will finance a
portion of long-term (permanent) growth in assets with short-term financing
Which of the following is NOT an example of a financial asset? correct answers Property, plant,
and equipment
Which of the following statements is correct? correct answers The incremental operating cash
flow for capital budgeting includes return on invested capital, which is net income, and return of
part of invested capital, which is depreciation
The bottom-up method for forecasting sales correct answers Relies on the ability of sales
personnel to assess future demand, usually without the aid of statistical models
A(n) ________ is generally obtained from a bank or insurance company and the borrower agrees
to make a series of payments consisting of interest and principal correct answers term loan
Which of the following statements is most correct? correct answers If the maturity risk premium
were zero and the rate of inflation were expected to increase in the future, then the yield curve
for U.S. Treasury securities would, other things held constant, have an upward slope
The premium is compensation for the possibility that the borrower will not be able to pay the
debt's interest and principal on time correct answers default risk
, Your uncle would like to restrict his interest rate risk and his default risk, but he still would like
to invest in corporate bonds. Which of the possible bonds listed below satisfies your uncle's
criteria? correct answers AAA bond with 5 years to maturity
An American Depository Receipt (ADR) represents correct answers Certificates representing
ownership in stocks of foreign companies that are held in trust by a bank located in the country
the stock is traded
Which of the following is not an example of a financial asset? correct answers Inventory
A cash budget is correct answers A statement of a firm's planned inflows and outflows of cash
used to ensure that a firm has available cash to meet short-term financial obligations
The preemptive right is important to shareholders because it correct answers Protects the current
shareholders against dilution of ownership interests
Which of the following rules are essential to successful cash flow estimates, and ultimately, to
successful capital budgeting? correct answers Only incremental cash flows are relevant to the
accept/ reject decision
A protective feature on preferred stock that requires preferred dividends previously not paid to be
disbursed before any common stock dividends can be paid is called what? correct answers
Cumulative dividends
During recessions the demand for funds typically correct answers decreases
Bond ratings of and higher are considered to be investment grade bonds. correct answers BBB
are often used as the plug figure in pro forma projections correct answers cash balances
