De Vry Busn 379 Finance Week 1 Homework Questions & Answers Essay Example
Finance Week 1 Homework
Questions & Answers
1. | Question : | (TCO 1) Which of the following statements is not true regarding the goal of financial management? | | | Student Answer: | x | The goal of maximizing the value per share of existing stock is relevant to all organizations. | | | | A way of aligning management goals to shareholder’s interest is to tie managerial compensation to the market value of the firm’s stock. | | | | For a company considering international operations, the goal will be the same but the company will have to consider the local social, economical and political environment in the decision-making process. | | | | All of the above are true. | | | | Points Received: | 0 of 3 | | Comments: | | | | 2. | Question : | (TCO 1) Market value is important to the financial manager because: | | | Student Answer: | | It reflects the value of the asset based on generally-accepted accounting principles. | | | | Is a crucial component of the balance sheet and can impact the financial statements. | | | x | Market values reflect the amount someone is willing to pay today for an asset. | | | | The market value of an asset reflects its historical cost. | | | | Points Received: | 3 of 3 | | Comments: | | | | 3. | Question : | For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:
Cost of goods sold............................... $1.2 million
Administrative expenses........................ $250,000
Marketing and selling expenses............... $175,000
Depreciation........................................ $500,000
Interest expense.................................. $200,000
Dividends
Questions & Answers
1. | Question : | (TCO 1) Which of the following statements is not true regarding the goal of financial management? | | | Student Answer: | x | The goal of maximizing the value per share of existing stock is relevant to all organizations. | | | | A way of aligning management goals to shareholder’s interest is to tie managerial compensation to the market value of the firm’s stock. | | | | For a company considering international operations, the goal will be the same but the company will have to consider the local social, economical and political environment in the decision-making process. | | | | All of the above are true. | | | | Points Received: | 0 of 3 | | Comments: | | | | 2. | Question : | (TCO 1) Market value is important to the financial manager because: | | | Student Answer: | | It reflects the value of the asset based on generally-accepted accounting principles. | | | | Is a crucial component of the balance sheet and can impact the financial statements. | | | x | Market values reflect the amount someone is willing to pay today for an asset. | | | | The market value of an asset reflects its historical cost. | | | | Points Received: | 3 of 3 | | Comments: | | | | 3. | Question : | For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:
Cost of goods sold............................... $1.2 million
Administrative expenses........................ $250,000
Marketing and selling expenses............... $175,000
Depreciation........................................ $500,000
Interest expense.................................. $200,000
Dividends