FINC330 BUSINESS FINANCE
FINC330 BUSINESS FINANCE
FALL 2012 – Section 5165 (Atherton)
Final Exam (December 2012)
Due Date: Sunday, December 16, 2012 by 11:59pm
The exam is an individual effort.
Do not work, consult, or collaborate with others.
Submit via Assignment folder in WebTycho (email if any trouble with WebTycho)
PART 1 – MULTIPLE CHOICE (CIRCLE THE CORRECT ANSWER FOR 1 POINT EACH) 1. The four basic sources of long-term funds for the business firm are
A) current liabilities, long-term debt, common stock, and preferred stock.
B) current liabilities, long-term debt, common stock, and retained earnings.
C) long-term debt, paid-in capital in excess of par, common stock, and retained earnings.
D) long-term debt, common stock, preferred stock, and retained earnings.
2. The relevant portion of an asset’s risk attributable to market factors that affect all firms is called
A) unsystematic risk.
B) diversifiable risk.
C) systematic risk.
D) None of the above. 3. Why is maximizing shareholder wealth a better goal than maximizing profits?
A) Maximizing shareholder wealth places greater emphasis on the short term.
B) Maximizing profits ignores the uncertainty that is related to expected profits.
C) Maximizing shareholder wealth doesn’t consider the timing of the returns D) Maximizing profits gives too much weight to the tax position of shareholders.
4. Net working capital is defined as
A) a ratio measure of liquidity best used in cross-sectional analysis.
B) the portion of the firm's assets financed with short-term funds.
C) current liabilities minus current assets.
D) current assets minus current liabilities.
5. The ________ is the time period that elapses from the point when the firm makes the outlay to purchase raw materials on account to the point when payment is made to the supplier of the goods.
A) cash conversion cycle
B) average payment cycle
C) average production cycle
D) average collection cycle
6. A
FALL 2012 – Section 5165 (Atherton)
Final Exam (December 2012)
Due Date: Sunday, December 16, 2012 by 11:59pm
The exam is an individual effort.
Do not work, consult, or collaborate with others.
Submit via Assignment folder in WebTycho (email if any trouble with WebTycho)
PART 1 – MULTIPLE CHOICE (CIRCLE THE CORRECT ANSWER FOR 1 POINT EACH) 1. The four basic sources of long-term funds for the business firm are
A) current liabilities, long-term debt, common stock, and preferred stock.
B) current liabilities, long-term debt, common stock, and retained earnings.
C) long-term debt, paid-in capital in excess of par, common stock, and retained earnings.
D) long-term debt, common stock, preferred stock, and retained earnings.
2. The relevant portion of an asset’s risk attributable to market factors that affect all firms is called
A) unsystematic risk.
B) diversifiable risk.
C) systematic risk.
D) None of the above. 3. Why is maximizing shareholder wealth a better goal than maximizing profits?
A) Maximizing shareholder wealth places greater emphasis on the short term.
B) Maximizing profits ignores the uncertainty that is related to expected profits.
C) Maximizing shareholder wealth doesn’t consider the timing of the returns D) Maximizing profits gives too much weight to the tax position of shareholders.
4. Net working capital is defined as
A) a ratio measure of liquidity best used in cross-sectional analysis.
B) the portion of the firm's assets financed with short-term funds.
C) current liabilities minus current assets.
D) current assets minus current liabilities.
5. The ________ is the time period that elapses from the point when the firm makes the outlay to purchase raw materials on account to the point when payment is made to the supplier of the goods.
A) cash conversion cycle
B) average payment cycle
C) average production cycle
D) average collection cycle
6. A