FIN 335 Exam Review

The mix of debt and equity used by a firm to finance projects is called:

• working capital management

• capital structure

• capital budgeting

The primary goal of corporate managers is to:

• Minimize the cost of debt

• Maximize book value of stock

• Increase overhead costs

• Maximize current value of stock

All of the following are examples of intagible assets except:

• Copyrights

• Goodwill

• Land purchased for a future building project

• Patents

Net Working Capital is:

• the change in current assets over one year

• the net change in cash flow from assets

• the amount of retained earnings from assets

• the difference between current assets and current liabilities

Leland Bros. Inc. has current liabilities of $11,700 and accounts receivable of $15,200. Stockholder's equity is equivalent to $21,000. What is net working capital?

• $3800

• -$3800

• $3500

• $6900

James' Cleaning Company owes a total of $11,354 in taxes for 2018. They had a taxable income of $51,609. If JCC earns an additional $100 in income, they will owe another $34 in taxes. What is JCC's average tax rate on $51,709?

• 10%

• 34%

• 36%

• 22%

James' Cleaning Company owes a total of $11,354 in taxes for 2018. They had a taxable income of $51,609. If JCC earns an additional $1 in income, they will owe another $0.34 in taxes. What is JCC's marginal tax rate?

• 22%

• 34%

• 35%

• 9%

In 2019, a new tax schedule will be released, shown above. If JCC earns $82,348 in taxable income, how much will they owe in taxes?

• $17,500

• $13,750

• $20,248

• $16,248

Short-term solvency measures are also called:

• Tyrion ratios

• profitability measures

• liquidity measures

• leverage ratios

The profit earned for every dollar of sales is represented by:

• Net income

• Profit margin

• Sales-asset ratio

• Retained earnings