Question 1

Tim works for a large manufacturing company and is now in charge of all fixed asset purchases.In other words,Tim is in charge of:

Accepted Answer

A) capital structure management 
B) asset allocation 
C) risk management 
D) capital budgeting 
E) working capital management 
A) capital structure management 
B) asset allocation 
C) risk management 
D) capital budgeting 
E) working capital management D

Question 2

Over-the-counter markets are __________ markets.

Accepted Answer

A) dealer 
B) franchise 
C) private 
D) auction 
E) physical 
A) dealer 
B) franchise 
C) private 
D) auction 
E) physical A

Question 3

Working capital management includes which one of the following?

Accepted Answer

A) deciding which new projects to accept 
B) deciding whether to purchase a new machine or fix a current machine 
C) determining which customers will be granted credit 
D) determining how many new shares of stock should be issued 
E) establishing the target debt-equity ratio 
A) deciding which new projects to accept 
B) deciding whether to purchase a new machine or fix a current machine 
C) determining which customers will be granted credit 
D) determining how many new shares of stock should be issued 
E) establishing the target debt-equity ratio C

Question 4

Which one of the following is a working capital decision?

Accepted Answer

A) How should the firm raise additional capital to fund its expansion? 
B) What debt-equity ratio is best suited to our firm? 
C) What is the cost of debt financing? 
D) Which type of debt is best suited to finance our inventory? 
E) How much cash should the firm keep in reserve? 
A) How should the firm raise additional capital to fund its expansion? 
B) What debt-equity ratio is best suited to our firm? 
C) What is the cost of debt financing? 
D) Which type of debt is best suited to finance our inventory? 
E) How much cash should the firm keep in reserve?

Question 5

Large Australian company stocks such as BHP and Telstra:

Accepted Answer

A) can only trade on the ASX 
B) can trade on the stock exchange of their choosing as long as they qualify for listing 
C) trade only in dealer markets 
D) are sold to investors as private placement and are held to maturity 
E) trade over the counter 
A) can only trade on the ASX 
B) can trade on the stock exchange of their choosing as long as they qualify for listing 
C) trade only in dealer markets 
D) are sold to investors as private placement and are held to maturity 
E) trade over the counter

Question 6

Margie opened a used book store and is both the 100 per cent owner and the store's manager.Which type of business entity does Margie own if she is personally liable for all the store's debts?

Accepted Answer

A) sole proprietorship 
B) limited partnership 
C) corporation 
D) joint stock company 
E) general partnership 
A) sole proprietorship 
B) limited partnership 
C) corporation 
D) joint stock company 
E) general partnership

Question 7

Capital budgeting includes the evaluation of which of the following?

Accepted Answer

A) size of future cash flows only 
B) size and timing of future cash flows only 
C) timing and risk of future cash flows only 
D) risk and size of future cash flows only 
E) size,timing,and risk of future cash flows 
A) size of future cash flows only 
B) size and timing of future cash flows only 
C) timing and risk of future cash flows only 
D) risk and size of future cash flows only 
E) size,timing,and risk of future cash flows

Question 8

The primary goal of financial management is to maximise the:

Accepted Answer

A) current net income 
B) net working capital 
C) number of shares outstanding 
D) market value of the existing stock 
E) capital structure 
A) current net income 
B) net working capital 
C) number of shares outstanding 
D) market value of the existing stock 
E) capital structure

Question 9

Which of the following is an example of the agency problem?

Accepted Answer

A) Managers always invest in projects that have appropriate returns and that will increase shareholder wealth. 
B) Managers resign when they believe they have not always acted in the best interests of shareholders. 
C) Managers conduct an acquisition program purely to increase the size of an organisation. 
D) Managers do not look for new projects as they want to avoid business risk. 
E) Both C and D are examples of the agency problem. 
A) Managers always invest in projects that have appropriate returns and that will increase shareholder wealth. 
B) Managers resign when they believe they have not always acted in the best interests of shareholders. 
C) Managers conduct an acquisition program purely to increase the size of an organisation. 
D) Managers do not look for new projects as they want to avoid business risk. 
E) Both C and D are examples of the agency problem.

Question 10

Which one of the following functions should be assigned to the treasurer rather than the controller?

Accepted Answer

A) data processing 
B) cost accounting 
C) tax management 
D) cash management 
E) financial accounting 
A) data processing 
B) cost accounting 
C) tax management 
D) cash management 
E) financial accounting

Question 11

Which one of the following statements correctly applies to a sole proprietorship?

Accepted Answer

A) The business entity has an unlimited life. 
B) The ownership can easily be transferred to another individual. 
C) The owner enjoys limited liability for the firm's debts. 
D) Debt financing is easy to arrange in the firm's name. 
E) Obtaining additional equity is dependent on the owner's personal finances. 
A) The business entity has an unlimited life. 
B) The ownership can easily be transferred to another individual. 
C) The owner enjoys limited liability for the firm's debts. 
D) Debt financing is easy to arrange in the firm's name. 
E) Obtaining additional equity is dependent on the owner's personal finances.

Question 12

Working capital management includes which of the following?
I.controlling the inventory level
II.determining when to pay suppliers
III.deciding how much long-term debt to assume
IV.controlling the amount of cash that is readily available

Accepted Answer

A) I and II only 
B) I and IV only 
C) II and III only 
D) I,II and IV only 
E) II,III and IV only 
A) I and II only 
B) I and IV only 
C) II and III only 
D) I,II and IV only 
E) II,III and IV only

Question 13

Which one of the following situations is most likely to create an agency conflict?

Accepted Answer

A) compensating a manager based on his or her division's net income 
B) giving all employees a bonus if a certain level of efficiency is maintained 
C) hiring an independent consultant to study the operating efficiency of the firm 
D) rejecting a profitable project to protect employee jobs 
E) selling under-performing assets owned by the firm 
A) compensating a manager based on his or her division's net income 
B) giving all employees a bonus if a certain level of efficiency is maintained 
C) hiring an independent consultant to study the operating efficiency of the firm 
D) rejecting a profitable project to protect employee jobs 
E) selling under-performing assets owned by the firm

Question 14

The amount of debt and equity used by a firm to finance its operations is called the
Firm's:

Accepted Answer

A) debt ratio 
B) working capital ratio 
C) capital structure 
D) financial position 
E) cash position 
A) debt ratio 
B) working capital ratio 
C) capital structure 
D) financial position 
E) cash position

Question 15

A corporation:

Accepted Answer

A) can neither sue another party nor be sued 
B) may not own property 
C) may enter into contracts to borrow funds 
D) can issue its own shares but cannot purchase shares in another entity 
E) can be formed by an oral agreement amongst the shareholders 
A) can neither sue another party nor be sued 
B) may not own property 
C) may enter into contracts to borrow funds 
D) can issue its own shares but cannot purchase shares in another entity 
E) can be formed by an oral agreement amongst the shareholders

Question 16

The most important function of a financial market is:

Accepted Answer

A) to facilitate the flow of funds between lenders and borrowers 
B) to provide a market for shares 
C) to provide information about an issuing company's financial situation 
D) to secure profits for brokers and agents 
E) to provide information about shares 
A) to facilitate the flow of funds between lenders and borrowers 
B) to provide a market for shares 
C) to provide information about an issuing company's financial situation 
D) to secure profits for brokers and agents 
E) to provide information about shares

Question 17

A securities market with a physical location that is designed to match buyers with
Sellers is called a(n)________ market:

Accepted Answer

A) dealer 
B) private 
C) auction 
D) franchise 
E) block sale 
A) dealer 
B) private 
C) auction 
D) franchise 
E) block sale

Question 18

Will and Bill both enjoy sunshine,water,and surfboards.Thus,the two friends decided to create a business together in Sydney renting surfboards,paddle boats,and inflatable devices.Will and Bill will equally share in the decision making and in the profits or losses.Which type of business did they create if they both have full personal liability for the firm's debts?

Accepted Answer

A) sole proprietorship 
B) limited partnership 
C) corporation 
D) joint stock company 
E) general partnership 
A) sole proprietorship 
B) limited partnership 
C) corporation 
D) joint stock company 
E) general partnership

Question 19

The legal papers which designate a firm's name,nature of business,and intended life
Are called the:

Accepted Answer

A) corporate bylaws 
B) articles of incorporation or constitution 
C) partnership agreement 
D) joint stock company forms 
E) proprietary declaration 
A) corporate bylaws 
B) articles of incorporation or constitution 
C) partnership agreement 
D) joint stock company forms 
E) proprietary declaration

Question 20

The primary market refers to:

Accepted Answer

A) the original sale of securities by the issuer 
B) transactions between two institutional shareholders 
C) the sale of securities by an individual shareholder 
D) the first trade of a firm's securities when the financial markets open in the morning 
E) all transactions on the NYSE 
A) the original sale of securities by the issuer 
B) transactions between two institutional shareholders 
C) the sale of securities by an individual shareholder 
D) the first trade of a firm's securities when the financial markets open in the morning 
E) all transactions on the NYSE

Tim works for a large manufacturing company and is now in charge of all fixed asset purchases.In other words,Tim is in charge of:

Over-the-counter markets are __________ markets.

Working capital management includes which one of the following?

Which one of the following is a working capital decision?

Large Australian company stocks such as BHP and Telstra:

Margie opened a used book store and is both the 100 per cent owner and the store's manager.Which type of business entity does Margie own if she is personally liable for all the store's debts?

Capital budgeting includes the evaluation of which of the following?

The primary goal of financial management is to maximise the:

Which of the following is an example of the agency problem?

Which one of the following functions should be assigned to the treasurer rather than the controller?

Which one of the following statements correctly applies to a sole proprietorship?

Working capital management includes which of the following? I.controlling the inventory level II.determining when to pay suppliers III.deciding how much long-term debt to assume IV.controlling the amount of cash that is readily available

Which one of the following situations is most likely to create an agency conflict?

The amount of debt and equity used by a firm to finance its operations is called the Firm's:

A corporation:

The most important function of a financial market is:

A securities market with a physical location that is designed to match buyers with Sellers is called a(n)________ market:

The legal papers which designate a firm's name,nature of business,and intended life Are called the:

The primary market refers to:

Financial Statements, Taxes, and Cash Flow

Working With Financial Statements

Introduction to Valuation: the Time Value of Money

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Equity Markets and Stock Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Some Lessons From Capital Market History

Risk and Return

Long-Term Financing

Leverage and Capital Structure

Dividends and Dividend Policy

Raising Capital

Short-Term Financial Planning

Working Capital Management

International Aspects of Financial Management

Filters

Exam 1: Introduction to Financial Management

Tim works for a large manufacturing company and is now in charge of all fixed asset purchases.In other words,Tim is in charge of:

Over-the-counter markets are __________ markets.

Working capital management includes which one of the following?

Which one of the following is a working capital decision?

Large Australian company stocks such as BHP and Telstra:

Margie opened a used book store and is both the 100 per cent owner and the store's manager.Which type of business entity does Margie own if she is personally liable for all the store's debts?

Capital budgeting includes the evaluation of which of the following?

The primary goal of financial management is to maximise the:

Which of the following is an example of the agency problem?

Which one of the following functions should be assigned to the treasurer rather than the controller?

Which one of the following statements correctly applies to a sole proprietorship?

Working capital management includes which of the following? I.controlling the inventory level II.determining when to pay suppliers III.deciding how much long-term debt to assume IV.controlling the amount of cash that is readily available

Which one of the following situations is most likely to create an agency conflict?

The amount of debt and equity used by a firm to finance its operations is called the Firm's:

A corporation:

The most important function of a financial market is:

A securities market with a physical location that is designed to match buyers with Sellers is called a(n)________ market:

The legal papers which designate a firm's name,nature of business,and intended life Are called the:

The primary market refers to:

Financial Statements, Taxes, and Cash Flow

Working With Financial Statements

Introduction to Valuation: the Time Value of Money

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Equity Markets and Stock Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Some Lessons From Capital Market History

Risk and Return

Long-Term Financing

Leverage and Capital Structure

Dividends and Dividend Policy

Raising Capital

Short-Term Financial Planning

Working Capital Management

International Aspects of Financial Management

Filters