A. management of money invested in business assets expected to increase in market value or otherwise pay a fair return; management of money invested in assets expected to increase in market value or pay a fair return.
B. study and application of Accounting principles as they pertain to any organization; study and application of Accounting principles as they pertain to a business.
C. management of money invested in assets expected to increase in market value or otherwise pay a fair return; management of money invested in business assets expected to increase in market value or otherwise pay a fair return.
D. study of the management of the money supply in the economy; study of the financial management for a company.
6.67 points
Question 2
1. …show more content…
For our course, the primary goal of the financial management function for a business is ___.
Answer
A.
Maximize the market value of the business and its common stock (in order to ensure the Owners receive at least a fair return).
B.
Maximize Sales growth and market share.
C.
Minimize Expenses for a given level of Sales.
D.
Maximize Net Earnings or Net Profit Margin for a given level of Sales.
6.67 points
Question 3
1.
From a legal organization perspective, "unincorporated" means _____ and is a problem because _____.
Answer
A. a business has been established as a separate legal person, but has lost its charter because it did not pay its taxes; the company may not be able to obtain business credit.
B. the owner-operator or partners have not established their business as a separate legal person; it exposes the owners to unnecessary risks and unnecessary potential costs.
C. the owner operator or partners have lost the corporate charter because the company was sold to another party; their income taxes will be unnecessarily high.
D. the company was incorporated in a state other than its headquarters state; the company will be exposed to double taxation.
6.67 points
Question 4
1.
For the economic or cash value of a business or its common stock: "intrinsic value" means _____ and "market value" means _____. Management needs to work to maximize the ____ value of a business.
Answer
A. the current market price; long-term theoretical value; market
B. an estimate of the cash value based on possibly incorrect information by the marginal investor; economic or cash value; intrinsic
C. an estimate of true value based on accurate risk and return data; current market price; intrinsic.
D. an estimate of true value based on historical data; current market price; market.
6.67 points
Question 5
1.
From the textbook's description, three techniques stockholders can use to motivate management to pursue the stockholders' interests (instead of management's selfish interests) are _____.
Answer
A. compensation; threat of being fired; threat of selling the company.
B. requiring management to own a lot of common stock; threat of being fired; compensation.
C. effective communication; providing generous compensation not related to company performance; providing job security unrelated to company performance.
D. the threat of being fired; compensation; salary deferment.
6.67 points
Question 6
1.
As described in the textbook, three ways capital is allocated from the "Savers" to the "Borrowers" (aka "Productive Project Investors") are ___.
Answer
A. transfers through commercial banks; transfers through mutual funds; transfers through investment banks.
B. indirect transfers through financial intermediaries like commercial banks; indirect transfers through investment banks; direct transfers through primary market transactions.
C. indirect transfers through brokers and dealers; indirect transfers through commercial banks; direct transfers through investment banks.
D.
There is no option D.
6.67 points
Question 7
1.
Healthy, positive economic growth for a country (and the world) depends on efficient financial markets because ___.
Answer
A. economic growth is driven by Productive Project Investors (i.e., "Borrowers") who need to obtain enough capital at a reasonable cost.
B. the U.S. federal government cannot cause economic growth to happen unless it can sell enough U.S. Treasury securities to promote it.
C.
Savers need to have confidence they can earn a good return on their savings accounts and 401(k) plan investments or else they will not increase their spending enough to cause economic growth to happen.
D.
There is no option D.
6.67 points
Question 8
1.
What are the four ways the markets for financial assets/instruments can be classified?
Answer
A. physical asset markets; spot markets; secondary markets; capital markets.
B. money markets; capital markets; private markets; spot markets.
C. spot/futures markets; primary/secondary markets; money/capital markets; private/public markets.
D.
There is no option D.
6.67 points
Question 9
1.
A commercial bank ___; a mutual fund ___; an investment bank ___; and a financial services conglomerate ___.
Answer
A. sells shares and invests in portfolios of business loans; underwrites whole security offerings; acts as a securities broker; is a holding company which owns a number of different kinds of financial businesses.
B. takes deposits and makes loans to businesses; sells shares and invests in portfolios of financial instruments; underwrites whole security offerings from corporate and government issuers; is a holding company which owns a number of different kinds of financial businesses.
C.
There is no option C.
D.
There is no option D.
6.67 points
Question 10
1.
What are the names of the three stock market indexes highlighted in the textbook, how many stock are in the index, and what is their general purpose?
Answer
A.
S&P 500 (500 stocks); VGTSX Global (2,000 stocks); Russell 2000 (2,000 stocks); to predict the future direction for stock prices.
B.
American Stock Exchange (800 stocks); Dow Jones Industrial Average (1,000); S&P 500 (500 stocks); to display which stocks are doing well versus those those that are not doing well.
C.
Dow Jones Industrial Average (30 stocks); Standard & Poor's 500 (500 stocks); NASDAQ (2,800 stocks); to show the actual historical market value performance of the stock market as a whole.
D.
There is no option D.
6.67 points
Question 11
1.
What is being measured by the standard financial report: the Balance Sheet?
Answer
A.
The market value of all assets owned and liabilities owed at a point in time.
B.
The total value of all sales, expenses, and net earnings for a period of time.
C.
The total value of all investing and financing activities over a period of time.
D.
The historical cost of all assets owned and liabilities owed at a point in time.
E.
The amount of cash the owners can take out of the company without hurting it for a period of time.
6.67 points
Question 12
1.
What is being measured by the standard financial report: the Income Statement?
Answer
A.
The market value of all assets owned and liabilities owed at a point in time.
B.
The total value of all Sales, Expenses, and/or Net Earnings over a period of time.
C.
The total value of all investing and financing activities for a period of time.
D.
The historical cost of all assets owned and liabilities owed at a point in time.
E.
The amount of cash the owners can take out of the country without hurting it for a period of time.
6.67 points
Question 13
1.
What is being measured by the standard financial report: the Cash Flow Statement?
Answer
A.
The market value of all assets owned and liabilities owed at a point in time.
B.
The total value of all sales and, expenses, and net earnings for a period of time.
C.
The total value of all investing and financing activities for a period of time.
D.
The historical cost of all assets owned and liabilities owed at a point in time.
E.
The amount of cash the owners can take out of the company without hurting it for a period of time.
6.67 points
Question 14
1.
What does the special purpose financial measurement of "Free Cash Flow" intend to measure?
Answer
A.
The market value of all assets owned adn liabilities owed at a point in time.
B.
The total value for all sales, expenses and net earnings for a period of time.
C.
The total value of all investing and financing activities for a period of time.
D.
The historical cost of all assets owned and liabilities owed at a point in time.
E.
The amount of cash the owners can take out of the company without hurting it for a period of time.
6.67 points
Question 15
1.
For the given Income Statement and Balance Sheet for MacGregor Manufacturing Inc. (see the Word file posted in the Assignments section to see this supplemental information), what was Operating Cash Flow for 2009? What were Capital Expenditures for 2009? What was the Change in Net Operating Working Capital for 2009? So, Free Cash Flow for 2009 was ___.
Answer
A.
$185.2; $100: $35: $50.2
B.
$229.1; $100; $50; $79.1
C.
$229.1; $100; $35; $94.1
D.
$421.7; $78; $35: $187.9