ADM 474 – Financial Management – Flashcards
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The residual income of the firm belongs to
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common stockholders
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Corporate restructuring has been one result of more institutional ownership. Restructuring can cause
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all of the above.
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Which of the following would not be classified as a current asset?
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Investments
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The most rigorous test of a firm's ability to pay its short-term obligations is its
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Quick Ratio
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Gross profit is equal to
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sales minus cost of goods sold.
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The net worth of a firm
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?
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Which of the following would not be included in the balance sheet investment account?
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marketable securities
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A firm's purchase of plant and equipment would be considered a
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use of cash for investment activities.
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A Subchapter S corporation
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has all the organizational benefits of a corporation and its income is only taxed once.
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Which of the following is an outflow of cash?
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the payment of cash dividends
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If the company's accounts receivable turnover is increasing, the average collection period:
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is going down
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Which two ratios are used in the DuPont system to create return on assets?
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Profit margin and asset turnover
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Future financial managers will need to understand
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Future financial managers will need to understand
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Professor Merton Miller received the Nobel prize in economics for his work on
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capital structure theory.
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In examining the liquidity ratios, the primary emphasis is the firm's
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In examining the liquidity ratios, the primary emphasis is the firm's
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One of the major advantages of a sole proprietorship is
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low operating costs.
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Agency problems are least likely to arise in which organizational form?
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sole proprietorship
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A statement of cash flows allows a financial analyst to determine
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?
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The Sarbanes-Oxley Act was passed in an effort to
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control corrupt corporate behavior.
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Money markets would include which of the following securities?
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treasury bills and commercial paper.
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Reinvested funds from retained earnings theoretically belong to:
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Reinvested funds from retained earnings theoretically belong to:
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If a firm has both interest expense and lease payments,
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?
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When a corporation uses the financial markets to raise new funds, the sale of securities is made in the
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primary market.
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A corporation is
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all of the above.
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Free cash flow is equal to:
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cash flow from operating activities minus capital expenditures, minus dividends
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The financial markets allocate capital to corporations by
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The financial markets allocate capital to corporations by
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Which of the following is not subtracted out in arriving at operating income?
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interest expense
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Professors Harry Markowitz and William Sharpe received their Nobel prize in economics for their contributions to the
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theories of risk-return and portfolio theory.
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The ______________ method of inventory costing is least likely to lead to inflation-induced profits.
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LIFO
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In the past, the study of finance has included
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all of the above.
