Bfin 350 - Study guides, Class notes & Summaries

BFIN 350 Chapter 1 and 2 Exam Questions with Correct Answers The balance sheet is made up of these five key components - Answer-Fixed assets Long term Debt Current Assets Current Liabilities Shareholders Equity Using the balance sheet model of the firm, finance may be thought of as analysis of three primary subject areas: - Answer-Capital Budgeting Capital Structure Net Working Capital The need to manage net working capital arises because - Answer-There is a mismatch bet...

BFIN 350 Chapter 5-9 Test Questions with Complete Solutions The rate of return used when computing the present value is - Answer-referred to as the discount rate while the rate used when computing a future value is referred to as the compound rate As long as the interest rate is greater than zero, the present value of a single sum will always - Answer-be less than the future value to create the same future value given a stated discount rate, you can - Answer-increase the present value a...

BFIN 350 CHP 4 Exam Questions with Answers What is commonly cited as a reason for financial distress and failure? - Answer-A lack of effective long-range planning The short run is usually months, the long run is usuallly years - Answer-12 months, 2-5 years formulates the way financial goals are to be achieved; therefore a is a statement about what is to be done in the future - Answer-Financial planning, a financial plan True or false, growth by itself is an appropriate goal for a fin...

BFIN 350 CHP 20 Exam Questions and Answers All Correct What is the basic objective of cash management? - Answer-It is to keep the investment in cash as low as possbile while still keeping the firm operating efficiently and as effectively as possible. What is the goal of cash management? (hint: think AR and AP) - Answer-The goal of cash management is to collect early and pay late What are the 3 reasons John Maynard Keynes identified as being reasons why liquidity is important? - Answer-1) ...

BFIN 350 Chapter 3 and 4 Exam Questions with Answers The financial ratio measured as EBIT plus depreciation divided by interest expense - Answer-Cash Coverage Ratio The financial ratio measured as the firm's long-term debt divided by its total capitalization - Answer-the long-term debt ratio The long-term debt ratio is probably of most interest to a firm's - Answer-debt holders The function described as the profit margin times the total asset turnover times the equity multiplier is k...

BFIN 350 Chapter 5-9 Test Questions with Complete Solutions The rate of return used when computing the present value is - Answer-referred to as the discount rate while the rate used when computing a future value is referred to as the compound rate As long as the interest rate is greater than zero, the present value of a single sum will always - Answer-be less than the future value to create the same future value given a stated discount rate, you can - Answer-increase the present value a...

BFIN 350 Chapter 1 and 2 Exam Questions with Correct Answers The balance sheet is made up of these five key components - Answer-Fixed assets Long term Debt Current Assets Current Liabilities Shareholders Equity Using the balance sheet model of the firm, finance may be thought of as analysis of three primary subject areas: - Answer-Capital Budgeting Capital Structure Net Working Capital The need to manage net working capital arises because - Answer-There is a mismatch bet...

BFIN 350 CHAPTER 1 AND 2 EXAM QUESTIONS WITH CORRECT ANSWERS Time preference refers to the fact that - Answer-investors prefer current cash flows to future cash flows The Primary market is defined as - Answer-the market for new issues A corporate security can be viewed as a contingent claim on the firm this means that - Answer-Debt holders will receive their payoff from the firm based on their fixed claim or the firm cash flows if less than the fixed claim If a firm has debt outstanding t...

BFIN 350 CHP 20 TEST QUESTIONS WITH ALL CORRECT ANSWERS If the net float is , the firms disbursment float exceeds its collection float and its available balance in bank exceeds its book balance. It is as the bank thinks the firm has more cash than it really does and this of course is desirable - Answer-positive, positive If the bank balace is less than the book balance, the firm has a float - Answer-net collection float Why is a net collection float undesirable? - Answer-It is undesirabl...