WorksheetsFinance Session (IBE)
Total questions: 10
Worksheet time: 5mins
A corporation sold a fixed asset for $100,000. This is
an investment cash flow and a source of funds.
an operating cash flow and a source of funds.
an operating cash flow and a use of funds.
an investment cash flow and a use of funds.
The wealth of the owners of a corporation is represented by
profits.
earnings per share.
share value.
cash flow.
The key variables in the owner wealth maximization process are
earnings per share and risk.
cash flows and risk.
earnings per share and share price.
profits and risk.
Financial managers evaluating decision alternatives or potential actions must consider
only risk.
only return.
both risk and return.
risk, return, and the impact on share price.
Which of the following valuation methods is superior to the others in the list since it considers expected earnings?
liquidation value
book value
P/E multiple
present value of the interest
In the statement of cash flows, retained earnings are handled through the adjustment of which two accounts?
Revenue and cost.
Assets and liabilities.
Depreciation and purchases.
Net profits and dividends.
All of the following are outflows of cash EXCEPT
an increase in inventory.
a decrease in accounts receivable.
an increase in accounts receivable.
a decrease in notes payable.
A firm has the balance sheet accounts, common stock, and paid-in capital in excess of par,
with values of $10,000 and $250,000, respectively. The firm has 10,000 common shares
outstanding. If the firm had a par value of $1, the stock originally sold for
$24/share.
$25/share.
$26/share.
$30/share.
Because equity holders are the last to receive any distribution of assets as a result of
bankruptcy proceedings, common stockholders expect
fixed dividend payments.
greater compensation in the form of dividends and/or rising stock prices.
all profits to be paid out in dividends.
warrants to be attached to the stock issue as a sweetener.
The four basic sources of long-term funds for the business firm are
current liabilities, long-term debt, common stock, and preferred stock.
current liabilities, long-term debt, common stock, and retained earnings.
long-term debt, paid-in capital in excess of par, common stock, and retained earnings.
long-term debt, common stock, preferred stock, and retained earnings.
