Quiz_1_-_Ch._1_and__2
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School
University of Fredericton *
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Course
5015
Subject
Finance
Date
Jan 9, 2024
Type
docx
Pages
4
Uploaded by PrivateWaterOstrich32
Started on
Wednesday, 7 December 2022, 7:08 PM
State
Finished
Completed
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Wednesday, 7 December 2022, 7:21 PM
Time taken
13 mins 8 secs
Grade
8.00
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Question
1
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01. What is the primary goal of financial management?
Select one:
a. Increased earnings
b. Maximizing cash flow
c. Maximizing shareholder wealth
d. Minimizing risk of the firm
Feedback
The correct answer is: Maximizing shareholder wealth
Question
2
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Question text
02. One of the major disadvantages of a sole proprietorship is
Select one:
a. that there is unlimited liability to the owner.
b. the simplicity of decision making.
c. low organizational costs.
d. low operating costs.
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The correct answer is: that there is unlimited liability to the owner.
Question
3
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03. A corporation is
Select one:
a. owned by shareholders who enjoy the privilege of limited liability.
b. easily divisible between owners.
c. a separate legal entity with perpetual life.
d. all of the other answers are correct
Feedback
The correct answer is: all of the other answers are correct
Question
4
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04. The largest Canadian corporations are mainly
Select one:
a. widely held.
b. family controlled.
c. U.S. controlled.
d. Japanese controlled.
Feedback
The correct answer is: widely held.
Question
5
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05. Future financial managers will need to understand
Select one:
a. international cash flows.
b. computerized funds transfers.
c. international currency hedging strategies.
d. all of the other answers are correct.
Feedback
The correct answer is: all of the other answers are correct.
Question
6
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06. Gross profit is equal to
Select one:
a. sales minus cost of goods sold.
b. sales minus (selling and administrative expenses).
c. sales minus (cost of goods sold and selling and administrative expenses).
d. sales minus (cost of goods sold and amortization expense).
Feedback
The correct answer is: sales minus cost of goods sold.
Question
7
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07. Which account represents the cumulative earnings of the firm since its formation, minus dividends paid?
Select one:
a. Share price
b. Common stock
c. Retained earnings
d. Accumulated amortization
Feedback
The correct answer is: Retained earnings
Question
8
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08. The P/E ratio is determined by
Select one:
a. net worth divided by earnings.
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b. market capitalization divided by earnings.
c. net worth per share divided by earnings per share.
d. market value per share divided by earnings per share
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The correct answer is: market value per share divided by earnings per share
Question
9
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Question text
09. A firm has current assets of $25,000, long term assets of $100,000, long term liabilities of $50,000, and $50,000 in shareholders' equity. What is its net working capital?
Select one:
a. zero
b. $50,000
c. $100,000
d. $25,000 Feedback
The correct answer is: zero
Question
10
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10. Book value of a firm
Select one:
a. is usually the same as the firm's market value.
b. is based on current asset costs.
c. is the same as net worth.
d. two of the above
Feedback
The correct answer is: is the same as net worth.
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