FREE AND STUDY GAMES ABOUT FIN MGT TEST 1 EXAM

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FREE AND STUDY GAMES ABOUT FIN MGT TEST 1 EXAM

QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -59 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation Question 1: Which one of the following accurately describes the three parts of the DuPont identity?

Answer:

equity multiplier, profit margin, and total asset turnover Question 2: Decisions made by financial managers should primarily focus on increasing which one of the following?

Answer:

market value per share of outstanding stock Question 3: A business partner whose potential financial loss in the partnership will not exceed

his or her investment in that partnership is called a:

Answer:

limited partner

Question 4: Which one of the following is classified as a tangible fixed asset?

Answer:

production equipment

Question 5: Ratios that measure how efficiently a firm manages its assets and operations to generate net income are referred to as _____ ratios.

Answer:

profitability Question 6: Which one of the following best states the primary goal of financial management?

Answer:

maximize the current value per share Question 7: Which one of the following terms is defined as a conflict of interest between the corporate shareholders and the corporate managers?

Answer:

agency problem Question 8: If a firm produces a 13 percent return on assets and also a 13 percent return on

equity, then the firm:

Answer:

has an equity multiplayer of 1.0

Question 9: Which of the following are included in current liabilities?

Answer:

account payable to a supplier that is due next week and loan payable to the bank in 10 months Question 10: Which one of the following statements concerning a sole proprietorship is correct?

Answer:

The owner of a sole proprietorship is personally responsible for all of the company's debts.Question 11: Which one of the following is the financial statement that summarizes a firm's revenue and expenses over a period of time?

Answer:

income statement

Question 12: what is Dividend payments less net new equity raised.

Answer:

cash flow to stockholders Question 13: Deciding whether or not to purchase a new machine for the production line.

Answer:

capital budgeting decision Question 14: On a common-size balance sheet all accounts for the current year are expressed

as a percentage of:

Answer:

total assets for the current year Question 15: Which one of the following business types is best suited to raising large amounts of capital?

Answer:

corporation Question 16: The percentage of the next dollar you earn that must be paid in taxes is referred to as the _____ tax rate.

Answer:

marginal Question 17: The DuPont identity can be used to help managers answer which of the following questions related to a firm's operations?

Answer:

• How many sales dollars has the firm generated per each dollar of assets? II. How many dollars of

assets has a firm acquired per each dollar in shareholders' equity? III. How much net profit is a firm generating per dollar of sales?Question 18: Any person or entity other than a stockholder or creditor who potentially has a claim on the cash flows of a firm

Answer:

stakeholder

Question 19: The book value of a firm is:

Answer:

Based on historical cost.Question 20: a business owned by a solitary individual who had unlimited liability for its debt is called a

Answer:

sole proprietorship Question 21: Which one of these identifies the relationship between the return on assets and the return on equity?

Answer:

duPont identity Question 22: Determining whether to pay cash for a purchase or use the credit offered by the supplier.

Answer:

working capital management decision Question 23: An increase in which of the following will increase the return on equity, all else constant?

Answer:

total asset turnover, net income, and debt-equity ratio Question 24: An increase in which one of the following will increase a firm's quick ratio without affecting its cash ratio?

Answer:

accounts receivable Question 25: Why should financial managers strive to maximize the current value per share of the existing stock?

Answer:

Because they have been hired to represent the interests of the current shareholders.