Flagler College

BUS 301

Chapter 5

Question1)According to the text, the main goal of financial management is to_____________

Question 2

Capital budgeting includes evaluation of

 

 Question 3

Teddy opens a furniture repair store. He owns 100% of the company, manages the company, and is personally liable for the store's debt. Which type of business entity does Teddy operate?               

 

Question 4

 

Company A has $128,000 in current assets and $96,500 in current liabilities. Discussions and decisions related to these accounts are referred to as

 

Question 5

 

FCT Markets is financed with 45 percent debt and 55 percent equity. This mixture of debt and equity is referred to as the firm's:              

 

Question 6

 

A company has a current ratio of 2.0 and an acid-test ratio of 1. Based only on this information, which of the following statement must be true?       

 

Question 7

 

BB Company reduced its administrative and general costs this year. This will increase which of the following ratios?

 

Question 8

US Government-provided coding systems to classify companies based on specific types of business operations and industries include:

 

Question 9

 

All else being constant, which of the following will decrease the profit margin of a company?     

 Question 10

Tally Company lists inventory of $74,315, COGS of $512,900 and sales of $683,200. What is the average days in inventory (rounded to the nearest whole day)?                                                                                                                                   

 

Question 11

By definition, a bank that pays simple interest on a savings account will pay interest:

Question 12

Computing the present value of a future cash flow to determine what that cash flow is worth today is called:

 

Question 13

Arun earned $64 in interest on his savings account last year. He decides to leave the $64 in his account this coming year so that it, too, will earn interest. This process of earning interest on prior interest earnings is called

 

Question 14

 

Damien expects to receive a sales bonus of $7,500 one year from now. The process of determining how much that bonus is worth today is called:

 

Question 15

 

The interest rate used to compute the present value of a future cash flow is called:

 

I. Prime rate       II. Discount rate                III. Required rate of return           II and III

 

Question 16

All else held constant, the present value of an annuity will decrease if you:

Question 17

Danica is buying a car and will finance it with a loan that requires monthly payments of $325 for the next five years. Her car payments can be described by which one of the following terms?

 

 

Question 18

 

Lenora pays 1 percent per month interest on her credit card account. When her monthly rate is multiplied by 12, the resulting answer is referred to as the

 

Question 19

The stated interest rate is the interest rate expressed

Question 20