1. The primary goal of financial management is:

a-Maximize current sales

b-Maximize the current value of each common stock.

c-Minimize operational costs

2. Earnings per share are equal to:

a-Net income divided by the total number of shares outstanding.

b-Gross income multiplied by the even value of the common shares.

c-Operational income divided by the even value of the common shares.

3. Financial leverage refers to:

a-The amount of debt that is used in the capital structure of a company.

b-The ratio of retained earnings and stockholders' equity.

c-The ratio of the cost of goods sold to total sales.

4. The present value of the future cash flows discounted at the appropriate discount rate is called the: a-Main value b-Present value. c-Simple Interest Rate.

5. The process of finding the present value of a certain future amount is often called:

a-increase.

b-discount.

c-compound.

6. _____________ can be interpreted as the equilibrium or breakeven financing rate that leads to a profitable project.

a-the recovery period.

b-the internal rate of return.

c-the net present value.

7. The most valuable investment disregarded if an alternative investment is chosen is a:

a-Expense value expense.

b-Sunk cost or Sunk cost.

c-Opportunity cost.

8. Variable costs _____________.

a-They change based on the number of units produced.

b-They change depending on the next unit produced.

c-they comprise the sum total of all the expenses of production of the company during a period of time

9. The marginal costs ______________.

a-(over a period of time) are constant regardless of the number of units produced.

b-They change depending on the next unit produced.

c-they comprise the total sum of all the production expenses of the company during some period of time.

10. Fixed costs ________________.

a-(over a period of time) are constant regardless of the number of units produced.

b-They change depending on the next unit produced.

c-they comprise the total sum of all the production expenses of the company during a period of time.

11. The amount of systematic risk present in a particular risky asset, in relation to the systematic risk present in an average risk asset, is called the _________ of the asset in particular:

a-Beta coefficient

b-Law of a single price.

c-Diversifiable risk.

12. The weighted average of a company's costs of its capital, preferred shares and after-tax debt is:

a-Expected performance by capital gain of the share.

b-Expected return for capital gain of the firm.

c-Weighted average cost of capital (CPPC).