(2 points) What goal should always motivate the actions of the firms financial manager?

(2 points) What is the primary disadvantage of the corporate form of organization? Name at least two of the advantages of corporate organization.

(3 points) What are the three types of financial management decisions? For each type of decision, give an example of a business transactions that would be relevant.

(4 points) Who are the owners of a corporation? What is the main reason that an agency relationship exists in the corporate form of an organization?

(2 points) One example of a primary market transaction would be the:

sale of 100 shares of stock by Maria to her best friend.

purchase by Theo of 5,000 shares of stock from his father.

sale of 1,000 shares of newly issued stock by Alt Company to Miquel.

sale by Terry of 50,000 shares of stock to his brother.

(2 points) A corporation:

is ultimately controlled by its board of directors.

is a legal entity separate from its owners.

is prohibited from entering into contractual agreements.

has its existence regulated by the rules set forth in its charter.

(2 points) There are four basic areas of financial topics: Corporate Finance, Investments, Financial institutions, and International Finance. Give three examples of financial institutions.

(3 points) What are NYSE and NASDAQ? What are the major differences between NYSE and NASDAQ?

(2 points) Margie opened a used bookstore and is both the 100 percent owner and the store's manager. Which type of business entity does Margie own if she is personally liable for all the store's debts?

Sole proprietorship

Limited partnership

Corporation

Joint stock company

(2 points) The daily financial operations of a firm are primarily controlled by managing the:

total debt level.

working capital.

capital structure.

capital budget.

(4 points) Sidewinder, Inc., has sales of $634,000, costs of $328,000, depreciation expense of $73,000, interest expense of $38,000, and a tax rate of 21 percent. What is the net income for this firm? Please show your work for this question.

(4 points) Benson, Inc., has sales of $38,530, costs of $12,750, depreciation expense of $2,550, and interest expense of $1,850. The tax rate is 21 percent.

What is the operating cash flow (OCF)? Please show your work for this question.

(Hint: Operating Cash Flow = EBIT + Depreciation Taxes)

EBIT: Earnings before interest and taxes

(2 points) For the calculations of Operating Cash Flow (OCF): EBIT + Depreciation Taxes, why didnt we subtract interest expenses from EBIT? Explain.

(6 points) The December 31, 2018, balance sheet of Justins Golf Shop, Inc., showed current assets of $1,490 and current liabilities of $1,210. The December 31, 2019, balance sheet showed current assets of $1,675 and current liabilities of $1,290. What was the companys 2019 change in net working capital, or NWC? (See the example from Ch.2 in the book or on the slides)

(Hint: = )

()

()

(2 points) The financial statement that summarizes a firm's accounting value as of a particular date is called the:

income statement.

cash flow statement.

liquidity position.

balance sheet.

(2 points) Which one of the following terms is defined as the total tax paid divided by the total taxable income?

Average tax rate

Variable tax rate

Marginal tax rate

Absolute tax rate

(2 points) Which one of the following is an intangible fixed asset?

Inventory

Machinery

Building

(2 points) Blythe Industries reports the following account balances: inventory of $417,600, equipment of $2,028,300, accounts payable of $224,700, cash of $51,900, and accounts receivable of $313,900. What is the amount of the current assets? Please show your work for this question.

(2 points) SDJ, Inc., has net working capital of $2,135, current liabilities of $5,320. What is the current ratio? Please show your work for this question.