BFIN 300 midterm exam UPDATED ACTUAL Questions and CORRECT Answers
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BFIN
Institution
BFIN
BFIN 300 midterm exam UPDATED
ACTUAL Questions and CORRECT
Answers
The process of planning and managing a firm's long-term investments is called - CORRECT
ANSWER- Capital Budgeting
Which of the following is an example of an indirect agency cost? - CORRECT
ANSWER- A lost opportunity
Which...
BFIN 300 midterm exam UPDATED
ACTUAL Questions and CORRECT
Answers
The process of planning and managing a firm's long-term investments is called - CORRECT
ANSWER✔✔- Capital Budgeting
Which of the following is an example of an indirect agency cost? - CORRECT
ANSWER✔✔- A lost opportunity
Which of the following forms of business organization is subject to double taxation? -
CORRECT ANSWER✔✔- Corporation
Control of a firm ultimately rests with - CORRECT ANSWER✔✔- The Stockholders
Which of the following should a financial manager take into account when considering an
opportunity? - CORRECT ANSWER✔✔- How much cash they expect to receive, When will
they receive the funds and How likely they are to receive the funds
ABC Corporation has current assets of $5,200, fixed assets of $26,000, current liabilities of
$4,900, and long-term debt of $15,000. What is the ABC Corporation's total equity? What is
the NWC of ABC Corporation? - CORRECT ANSWER✔✔- Total Equity $11,300, NWC
$300
Company X has fixed assets of $6million on its balance sheet that were originally purchased
for $10million; it can be sold for $7million today. The company's balance sheet also shows
current liabilities of $2.6million and NWC of $900,000. In addition, if all the current assets
were liquidated today, the company would receive $2.8million cash. What is the book value
of Company X's total assets? What is the market value of Company X's total assets? -
CORRECT ANSWER✔✔- BV $9.5million, MV $9.8million
Company has sales of $21,000, costs of $11,200, depreciation expense of $2,300, and interest
expense of $1,300. If the tax rate is 40 percent, what is the operating cash flow, or OCF? -
CORRECT ANSWER✔✔- OCF $7320 = EBIT $7500+Depreciation $2300-Taxes $2480
, XYZ Corporation's balance sheet of 2019 showed net fixed assets of $1.56million, and the
2020 balance sheet showed net fixed assets of $1.78 million. The company's 2020 income
statement showed a depreciation expense of $140,000. What was the company's net capital
spending for 2020? - CORRECT ANSWER✔✔- $360,000
Which one of the following is the financial statement which shows the accounting value of a
firm's equity as of a particular date? - CORRECT ANSWER✔✔- Balance sheet
Which is a financial leverage ratio? - CORRECT ANSWER✔✔- Debt to equity
Which is a key turnover ratio? - CORRECT ANSWER✔✔- Inventory turnover ratio, Asset
turnover ratio, Receivables turnover ratio and Fixed asset turnover ratio
Which of the following ratios are market-based ratios? - CORRECT ANSWER✔✔- P/E
ratio and P/BV ratio
Which of the followings are the correct set of components of ROE? - CORRECT
ANSWER✔✔- Profit margin, asset turnover, equity multiplier
Find Current ratio: Company A's balance sheet shows current assets of $6,300, fixed assets of
$32,000, total long-term liabilities of $16,200 and total equity of $18,100. - CORRECT
ANSWER✔✔- 1.58x
Interest earned on both the initial principal and the interest reinvested from the prior periods
is called - CORRECT ANSWER✔✔- Compound interest
Don Lemon invested $2,000 six years ago at 4.5%. He spends his earnings as soon as he
earns any interest so he only receives interest on his initial investment. Which type of interest
is Mr. Lemon earning? - CORRECT ANSWER✔✔- Simple interest
Alan Fishman just computed the present value of a $10,000 bonus he will receive in the
future. The interest rate he used in this process is referred to as which one of the following? -
CORRECT ANSWER✔✔- Discount rate
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