Busn 379 Essay

2416 Words Dec 14th, 2012 10 Pages
1. What is the goal of financial management for a sole proprietorship?
[pic]decrease long-term debt to reduce the risk to the owner
[pic]maximize net income given the resources of the firm
[pic]maximize the market value of the equity
[pic]minimize the tax impact on the proprietor
[pic]minimize costs and increase production

2. Working capital management includes which of the following?
[pic]establishing the inventory level
[pic]deciding when to pay suppliers
[pic]determining the amount of cash needed on a daily basis
[pic]establishing credit terms for customers
[pic]all of the above

3. Market value reflects which of the following:
[pic]The amount someone is willing to pay today for an asset.
[pic]The value of the asset
…show more content…
What is the EPS figure for 2008?
[pic]$1.30
[pic]$1.44
[pic]$0.77
[pic]$0.69

8. The income statement reflects:
[pic]income and expenses at the time when those items affect the cash flows of a firm.
[pic]income and expenses in accordance with GAAP.
[pic]the cash flows in accordance with GAAP.
[pic]the flow of cash into and out of a firm during a stated period of time.
[pic]the flow of cash into and out of a firm as of a particular date.

9. Green Leaf Nursery has EBIT of $250,000, interest of $30,000, taxes of $50,000, and depreciation of $80,000. What is the company’s operating cash flow?
[pic]$297,200
[pic]$280,000
[pic]$340,000
[pic]$270,000
[pic]$250,000

10. Mark deposited $1,000 today, in an account that pays eight percent interest, compounded semi-annually. Which one of the following statements is correct concerning this investment?
[pic]Mark will earn more interest in year 4 than he will in year 3.
[pic]Mark will receive equal interest payments every six months over the life of the investment.
[pic]Mark would have earned more interest if he had invested in an account paying 8 percent simple interest.
[pic]Mark would have earned more interest if he had invested in an account paying annual interest.
[pic]Mark will earn less and less interest each year over the life of the investment.

11. Mr. Smith will receive $8,500 a year for the next 14 years from a contract. If the interest rate on

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