QUESTION 1 Dividend payments are categorized as: cash flow from operating activities. cash flow from investment activities. cash flow from financing activities. all of the above. QUESTION 2 The world of finance can be divided into three broad areas: the banking system, financial management and investments/financial markets. True False 5 points QUESTION 3 Bondholders are rewarded by receiving interest and a share of the company's profits. True False 5 points

QUESTION 4 Net working capital can be referred to as: total assets minus current liabilities current assets minus total liabilities cash minus current liabilities current assets minus current liabilities 5 points

QUESTION 5 The CFO is the person primarily responsible for judging the financial viability of projects proposed by other executives. True False 5 points

QUESTION 6 The proprietorship form of organization gives the business owner the protection of limited liability True False 5 points

QUESTION 7 A business's financial statements are numerical representations of what it is physically doing True False 5 points

QUESTION 8 The income statement measures the flow of funds in and out of the firm over a period of time. True False 5 points

QUESTION 9 Three years ago a piece of equipment was purchased for $10,000. Assuming an eight-year life and straight-line depreciation, financial statements for the third year will show: depreciation expense of $3,000 on the income statement, and accumulated depreciation of $3,000 on the balance sheet. depreciation expense of $1,250 on the income statement, and accumulated depreciation of $3,000 on the balance sheet. depreciation expense of $1,250 on the income statement, and accumulated depreciation of $3,750 on the balance sheet. depreciation expense of $1,250 on the income statement, and accumulated depreciation of $1,250 on the balance sheet. 5 points

QUESTION 10 Municipal bonds are debt obligations of the states, municipalities and political subdivisions. They are exempt from federal taxation. True False 5 points QUESTION 11 The statement, "you can't know where you're going 'till you know where you came from," means that the past, with consideration of current information, is usually one of the best indicators of the firm's future performance. True False 5 points

QUESTION 12 Both accounting and finance are concerned primarily with the creation of financial statements and their use as tools for evaluating the firm's future prospects. True False 5 points

QUESTION 13 In addition to raising money, the government uses the tax system to Promote a larger and more comprehensive government authority Incentivize desirable behavior on the part of taxpayers Support our position as the world's strongest nation Keep the nation growing as rapidly as possible 5 points

QUESTION 14 The ultimate test of a firm's efficient use of its stockholders' money is its return on equity. True False 5 points

QUESTION 15 Differences between net income and cash flow come from: accounts receivable depreciation short-term securities All of the above A and B only 5 points QUESTION 16 A high inventory turnover ratio would be important to a company whose product has a high level of spoilage. True False 5 points

QUESTION 17 A debt to equity ratio of 2:1 suggests that for every dollar the firm has in equity, it has two dollars of long-term debt. True False 5 points

QUESTION 18 Financial assets are valuable because they give owners rights to future cash flows. True False 5 points

QUESTION 19 Cash flow from operating activities is increased by: depreciation an increase in accounts receivable an increase in inventory a decrease in accounts payable all of the above 5 points

QUESTION 20 The stock market is really the entire network of investors, brokers, and exchanges all connected together. True False