NDSU Finance 320 Chapter 1&3 Test with Complete Solutions Graded A+ Updated
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Course
NDSU Finance 320
Institution
NDSU Finance 320
NDSU Finance 320 Chapter 1&3 Test with Complete Solutions Graded A+ Updated
Which of the following is NOT a capital structure question?
A. A retail firm chooses to use a new supplier.
B. A manufacturing firm chooses to take the discount for paying accounts payable early.
C. A delivery company c...
NDSU Finance 320 Chapter 1&3 Test
with Complete Solutions Graded A+
Updated
Which of the following is NOT a capital structure question?
A. A retail firm chooses to use a new supplier.
B. A manufacturing firm chooses to take the discount for paying accounts payable early.
C. A delivery company chooses to buy more trucks.
D. None of the above are capital structure questions. - Answer-D. None of the above
are capital structure questions.
Which of the following is NOT an activity of working capital management?
A. Choosing the appropriate level of inventory
B. Establishing the firm's receivable policies
C. Establishing the firm's payment policies
D. All of the above are working capital management activities. - Answer-D. All of the
above are working capital management activities.
Which of the following can lead to increased expected cash flow over time to the firm?
A. Qualified and motivated employees
B. Greater customer satisfaction
C. Open and collaborative relations with the community
D. All of the above - Answer-D. All of the above
Of the following which group would be considered EXTERNAL PLAYERS of the firm? -
Answer-The loan officer at the firm's commercial bank
A ________ is a business that is owned entirely by an individual. - Answer-sole
proprietorship
A ________ has limited liability, is a legal entity, and has the greatest potential to raise
capital. - Answer-corporation
________ is a major disadvantage of the corporate form of business. - Answer-double
taxation
In agency theory, the owners of the business are referred to as ________, and the
managers are referred to as ________. - Answer-principals, agents
The problem of motivating one party to act in the best interest of another party is known
as the ________ - Answer-principal - agent problem
, ________ is the area of business that deals with how a company conducts its business
and implements controls to ensure proper procedures and ethical behavior - Answer-
Corporate Governance
What are the Four areas of finance - Answer-Financial Institutions
International Finance
Corporate Finance
Investments
Investments - Answer-ex: the activities around the buying and selling of financial assets.
A typical activity is the selling of a bond issue such as a school bond for building a new
school.
Corporate Finance - Answer-ex: the financial activities that support the operations of a
business. A typical financial activity in this area is borrowing funds to support a plant
expansion or supplementing short term cash needs.
International Finance - Answer-the financial activities performed in foreign countries for
a domestic company. A typical financial activity is the changing of the currency of one
country into the currency of another country.
Financial Institutions - Answer-the organizations that promote and facilitate the cycle of
money. A typical financial activity is offering checking and savings accounts as well as
selling securities such as certificates of deposit, stocks and bonds
capital budgeting decision - Answer-That a company chooses a new product to
introduce into the market is a
capital structure decision - Answer-that a company chooses to sell a bond to finance the
new product is a
working capital management decision - Answer-that a company sets production and
inventory levels on the new product is a
The oneminus−time payment of money at a future date is often called a - Answer-lump-
sum payment
A $100 deposit today that earns an annual interest rate of 10% is worth how much at
the end of two years? Assume all interest received at the end of the first year is
reinvested the second year. - Answer-$121
Which of the following is NOT an example of a financial transaction?
A. You use the ATM to withdraw British pounds so you can fly to London.
B. Your parents use their credit card to pay this term's college tuition.
C. Your roommate lends you $20 and you repay it in one week.
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