2073 Words Mar 31st, 2014 9 Pages
FALL 2012 – Section 5165 (Atherton)
Final Exam (December 2012)
Due Date: Sunday, December 16, 2012 by 11:59pm
The exam is an individual effort.
Do not work, consult, or collaborate with others.
Submit via Assignment folder in WebTycho (email if any trouble with WebTycho)

PART 1 – MULTIPLE CHOICE (CIRCLE THE CORRECT ANSWER FOR 1 POINT EACH) 1. The four basic sources of long-term funds for the business firm are
A) current liabilities, long-term debt, common stock, and preferred stock.
B) current liabilities, long-term debt, common stock, and retained earnings.
C) long-term debt, paid-in capital in excess of par, common stock, and retained earnings.
D) long-term debt, common stock,
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B) cash.
C) net profits after taxes minus preferred dividends.
D) the cumulative total of earnings reinvested in the firm.

15. A projected cash budget shortfall for one or two months may be
A) financed with short-term funding.
B) financed with long-term funding.
C) invested in marketable securities. D) invested in long-term funding.

16. A firm has a current ratio of 1; in order to improve its liquidity ratios, this firm might
A) improve its collection practices, thereby increasing cash and increasing its current and quick ratios.
B) improve its collection practices and pay accounts payable, thereby decreasing current liabilities and increasing the current and quick ratios.
C) decrease current liabilities by utilizing more long-term debt, thereby increasing the current and quick ratios. D) increase inventory, thereby increasing current assets and the current and quick ratios. 17. For a given interest rate, as the length of time until receipt of the funds increases, the present value interest factor
A) changes proportionally.
B) increases.
C) decreases.
D) remains unchanged.

18. Compounding interest more frequently ______________ future value.
A) decreases
B) increases
C) has no impact on
D) has an undetermined impact on

19. The key inputs to the valuation process include A) returns and risk.
B) cash flow, cash flow timing, and risk.
C) cash flows and

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