1. t/f the goal of the shareholders wealth maximization considers the risk of the various financial decisions 2. Profit maximizatiom does not adequately describe the goal of the firm because 3. what is the sales revenue minus cost of goods sold and operating expenses known as for income state...
1 tf the goal of the shareholders wealth maximization considers the risk of the various financial decisions 2 profit maximizatiom does not adequately describe the goal of the firm because 3
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Business Finance notes final exam test 1
Study online at https://quizlet.com/_443f2p
1. t/f the goal of the shareholders wealth
true
maximization considers the risk of the various
financial decisions
a. profit
2. Profit maximizatiom does not adequately describe
maximiza- tion
the goal of the firm because
does not re-
quire the
consider- ation
of risk
b.proft
maximiza- tion
ignores the the
3. what is the sales revenue minus cost of goods sold timing of a pro-
and operating expenses known as for income ject's return
state- ment purposes`
EBIT
4. The debt ratio is a measure of a firms leverage
5. what is the formula for debt ratio total debt/ total
as- sets
6. which of the following is always a non cash expense depreciation
7. bonds are traded In the money markets, while
com- mon stock is traded in the capital markets.
8. what is a non cash expense expense
reported on the
income
statement of
the current
accounting
period but there
was no related
cash payment
dur- ing the
period
1/
, Business Finance notes final exam test 1
Study online at https://quizlet.com/_443f2p
9. if current market interest rates rise what will happen they will fall
to the value of outstanding bonds?
10.if current market interest rates fall what will happen they will
to the value of outstanding bonds increaser
2/
, Business Finance notes final exam test 1
Study online at https://quizlet.com/_443f2p
11. depreciation expense affect tax related cash flows by decreasing tax-
able income
thus reducing
taxes
12. the most expensive source of captial new
common
stock
13.put these in order of most expensive to least new
expen- sive sources of capital (highest to lowest) common
stock
retained
earnings
preferred stock
14.what are corporate bonds, common stocks, treasury debt
bonds, financial leases classifies as money market
or capital market capital market
15.what is a negotiable certificate of deposit ,
commercial paper, treasury bills, classified as
money market
in- strument
16. money market instruments are classified as short term debt
in-
sturments
17.what are some examples of money market treasury bills,
instru- ments CDS
commercial pa-
per, bankers ac-
ceptances
18. capital market insturments are classifies as long term
financial
securities
3/
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