ID SECTION 1 (30 pointa) Anawer any 15 questsons on teading anong security holders Classification of tinancial marketa based one hand. a. prinary and secondary c. money and capital and raising money for the tim by IPO on the other b. domestie and foreign d. none of the above 2. In evaluating the project options under the capital budgeting tinancial manager considera which of the tollowing variables regarding the cash flow 7 a. size and availability a. riakineas and cost b. size, timing and ageney cost d. riakiness, size and timing 3. Agency problem ceaults from confliet of interest between a. bondholders and shareholders b. board members and managers ahareholders and the management d. management and agents 4. A business organization in which one group of partners run t he business and.a aubject to unliaited 1iabiiity while the other group have 1imited 1iabality is a a. General partnership b. Linited liability company c. Limited partnership d. Publia limited company which of the following is considered a basic question of Corporate rinance: b. d.all of the above are corzect Which of the following statements about a corporation is true? b. d. Which of the tollowing represents the matching principle in accounting? b. c. The production costs of inventory are recorded along with the revenue from 5 What long-term investment should the firm choose? How should the firm manage its working capital? What mixture of debt and equity should the firm maintain? 6. The life of the corporation is limited The corporation has limited liability in its dealings with suppliers It is not difficult to transfer ownership of corporate shares Equity that can be raised is limited to ahareholders personal wealth. 7. The cost of purchasing an item on account is recorded when payable is paid Revenue is recognized when the earnings process is substantially complete and the value of traded good can be reliably deternined. the sale on the day the sale is made. d. Both b and c are true. 8 Balance sheet assets are a. always equal to total liabilities plus shareholders' equity b. always listed in order of decreasing liquidity c represent items acquired with the use of the firm' s assumed liabilities and equity all of the above are true d. Opezating cash flow is differentiable from accounting cash flow concept by b. c. adding back interest and deducting depreciation deducting depreciation and adding Taxes offsetting the treatment of depreciation and interest as operating expenses