FIN 301 INTRO TO FINANCE EXAM QUESTIONS AND ANSWERS
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Course
FIN 301
Institution
FIN 301
Opportunity Costs - Answer-the value of the next highest-valued alternative use of a resource
Opportunity Costs consists of: - Answer-- foregone wages
- time
- production decisions
Foregone wages - Answer-- Why did you come to class today?
- Should you go to grad school?
Time - Answe...
FIN 301 INTRO TO FINANCE EXAM
QUESTIONS AND ANSWERS
Opportunity Costs - Answer-the value of the next highest-valued alternative use of a
resource
Opportunity Costs consists of: - Answer-- foregone wages
- time
- production decisions
Foregone wages - Answer-- Why did you come to class today?
- Should you go to grad school?
Time - Answer-outsourcing household chores
Production decisions - Answer-Should firms invest in R&D?
Corporate Finance - Answer-attempts to answer the following questions:
- Capital budgeting
- Capital structure
- Working capital management
Capital budgeting - Answer-process of planning and managing a firm's long-term
investments
- identify investment opportunities that are worth more to firm than costs
- evaluate investment size, timing, and risk
Capital structure - Answer-mixture of debt and equity maintained by firm
- ways in which firm obtains and manages long-term financing needs to support long-
term investment
- in theory, capital structure does not affect firm value
- in practice, it affects both risk and value of firm
- decide how and where to raise funds
Working capital management - Answer-firm's short term assets, inventory, and short
term liabilities
- managing resources for operations
- activities related to receipt and disbursement of cash
Forms of business organization - Answer-1. Sole proprietorship
2. Partnership
3. Corporation
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