Strayer FIN 100 Final Exam Questions

Final 2• Question 1 Which group of ratios might be most interesting to potential creditors of a firm? • Question 2 A firm’s sales forecast is usually based on • Question 3 _____________ costs are a function of quantity sold, not time. • Question 4 The profitability ratio that measures the return that shareholders earned on the equity they invested in the firm is the: • Question 5 _____________ costs are a function of time (not sales) and are generally contractual. • Question 6 Working capital does not include: • Question 7 The ________ is the time period that elapses from the point when the firm makes the outlay to purchase raw materials on account to the point when payment is made to the supplier of the goods. • Question 8 The willingness of a credit applicant to pay her or his bills is measured by: • Question 9 In the cash budget, the firm’s final sales forecast us usually a function of • Question 10 Taking advantage of unusual cash discounts or price bargains is an example of the: • Question 11 Which of the following short-term sources of funds is available only to the financially strongest concerns? • Question 12 The most important reason for directly issuing or using commercial paper dealers is: • Question 13 If a firm actually sells its accounts receivable, the process is known as: • Question 14 A short-term promissory note sold by high-credit-quality corporations and is backed solely by the credit quality of the issuer is called: • Question 15 The factor, unlike the commercial finance company: • Question 16 Capital budgeting is • Question 17 Your company owns land in a busy shopping district. If the chair of the company’s board of directors thinks they can build a plant on that land and that the land will incur no additional cost, the chair fails to take into account: • Question 18 Which one of the following best explains the impact on a firm that accepts a project with a negative NPV? • Question 19 The final step in the capital budgeting process is • Question 20 The time required for the cumulative cash flows from a project to equal zero is called the: • Question 21 Smith Company has a degree of operating leverage of 5, while Johnson Company has a degree of operating leverage of 2. Supplied with this knowledge, pick the response below that is most typical of Johnson Company. • Question 22 The hypotheses that states that firms try to time the market by issuing stocks when stock prices are high and repurchasing shares when prices are low is called: • Question 23 The cost of debt: • Question 24 In calculating the cost of new common stock using the constant dividend growth model, it is important that the __________ are subtracted from the price of the stock. • Question 25 A firm’s mix of debt and equity defines the firm’s: