What is the primary goal of financial management?
Maximizing cash flow
Maximizing shareholder wealth
Minimizing risk of the firm
Reinvested funds from retained earnings theoretically belong to:
All of the above
Industries most sensitive to inflation-induced profits are those with:
The key initial element in developing pro forma statements is:
a cash budget.
an income statement.
a sales forecast.
a collections schedule.
At the break-even point, a firm's profits are:
greater than zero.
less than zero.
equal to zero.
Not enough information to tell
Under what conditions must a distinction be made between money to be received today and money to be received in the future?
A period of recession.
When idle money can earn a positive return.
When there is no risk of nonpayment in the future.
If in determining the yield to maturity on a bond at a given interest rate, you get a value below the current market price, in the next calculation you should use:
a higher interest rate.
a lower interest rate.
a longer maturity.
a higher coupon payment.
The after-tax cost of preferred stock to the issuing corporation:
is the same as the before-tax cost.
is usually lower than the cost of debt.
is dependent on the firm's tax bracket.
None of the above
Cash flow can be said to equal:
income before depreciation and taxes minus taxes.
income before depreciation and taxes plus taxes.
income before depreciation and taxes plus depreciation.
income after taxes minus depreciation.
three investment alternatives all have some degree of risk and different expected returns, which of the following measures could best be used to rank the risk levels of the projects?
Coefficient of correlation
Coefficient of variation
Standard deviation of returns
Net present value