Finance 318

Which one of the following is most apt to create a situation where an agency conflict could arise? Separating management from ownership
Which one of the following is a working capital decision? How much cash should the firm keep in reserve
Which one of the following is a capital budgeting decision? Deciding whether or not to purchase a new machine for the production line
Which of the following is a primary market transaction? Sale of a new share of stock to an institutional investor
Which one of the following forms of business organization offers liability protection to some of its owners but not to all of its owners? Limited Partnership
The primary goal of financial management is to maximize which one of the following for a corporation? Market value of existing stock
The potential conflict of interest between a firms owners and its managers is referred to as: Agency problem
Which of the following business types is best suited to raising large amounts of capital? Corporation
A sole proprietorship: Has its profits taxed as personal income
Which of the following tax rates applies to the next dollar of taxable income that a firm earns? Marginal
Which one of the following statements concerning the balance sheet is correct? Assets are listed in descending order of liquidity
Which one of the following is the financial statement that summarizes a firms revenue and expenses over a period of time? Income statement
Net working capital is defined as: Current assets minus current liabilities
A firm has a current ratio of 1.4 and a quick ratio of 0.9. From this you safely conclude that: Has positive working capital
Common size financial statements present all income statement values as a percentage of: Sales
The DuPont identity can be used to help a financial manager determine the:I. degree of financial leverage used by a firm.II. operating efficiency of a firmIII. utilization rate of a firms assetsIV. rate of return on a firms assets I, II, III, and IV
Donald Jones Products is a company that was founded last year. While the outlook for the company is positive, it currently has negative earnings. If you wanted to measure the market value of this firm, which one of the following ratios would probably be best to monitor given the firms current situation: Price-sales ratio
Tech Motor Works has total assets of $689,400, long term debt of $299,500, total equity of $275,000, net fixed assets of $497,800, and sales of $721,500. The profit margin is 4.6%. What is the current ratio of the firm? 1.6675
Fincher, Inc. has a total debt ratio of 0.37. What is its equity multiplier? Equity multiplier=1.59

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