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Category: Business and Industry

Date Submitted: 11/25/2012 01:51 PM

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1. (TCO 1) The goal of financial management is to increase the: (Points : 3)

future value of the firm's total equity.

book value of equity

dividends paid per share

current market value per share

number of shares outstanding, thereby increasing the market value of equity

2. (TCO 1) Which of these activities is not a capital budgeting task? (Points : 3)

determining the amount of cash needed on a daily basis to operate a firm

identifying assets that produce value in excess of the cost to acquire those assets

evaluating the size and timing of future cash flows from a project

evaluating the risks associated with a proposed project

3. (TCO 1) Book values are different from market values because: (Points : 3)

Book values reflect the value of the asset based on generally-accepted accounting principles.

Book values are used in the company’s balance sheet.

Book values do not reflect the amount someone is willing to pay today for an asset.

All of the above

None of the above

4. (TCO 1) The income statement reflects: (Points : 3)

Income and expenses at the time when those items affect the cash flows of a firm.

Income and expenses in accordance with GAAP.

The cash flows in accordance with GAAP.

The flow of cash into and out of a firm during a stated period of time.

The flow of cash into and out of a firm as of a particular date.

5. (TCO1) Telemarket Inc. has sales of $625,000. They paid $43,000 in interest during the year and depreciation was $79,000. Administrative costs were $100,000 and other costs were $160,000. Assuming a tax rate of 35 percent, what is Telemarket’s taxes figure? (Points : 3)





6. (TCO 1) Home Best Hardware...