财务管理试卷(英语版)

《财务管理（英）》课程期末考试试卷

Part 1: Choice Questions (16 questions, 1 point each, 16 points total)

（Answer part 1 on the following table. Answers in other places will not be

considered.）

1.An increase in which one of the following will increase the operating cash

flow?

a. employee salaries

b. office rent

c. building maintenance

d. equipment depreciation

2.The process of planning and managing a firm’s long-term investments is

called:

a. working capital management.

b. financial depreciation.

c. capital budgeting.

d. capital structur

e.

3.The internal rate of return for a project will increase if:

a. the initial cost of the project can be reduced.

b. the total amount of the cash inflows is reduced.

c. the required rate of return is reduce

d.

d. the salvage value of the project is omitted from the analysis.

4.You spent $500 last week fixing the transmission in your car. Now, the brakes

are acting up and you are trying to decide whether to fix them or trade the

car in for a newer model. In analyzing the brake situation, the $500 you spent

fixing the transmission is a(n) _____ cost.

a. opportunity

b. sunk

c. incremental

d. fixed

5.The sustainable growth rate:

a. assumes there is no external financing of any kind.

b. is normally higher than the internal growth rate.

c. assumes the debt-equity ratio is variable.

d. is based on receiving additional external debt and equity financing.

6.Which of the following statements are correct concerning diversifiable risks?

I. Diversifiable risks can be essentially eliminated by investing in several securities.

II. The market rewards investors for diversifiable risk by paying a risk premium.

III. Diversifiable risks are generally associated with an individual firm or industry.

IV. Beta measures diversifiable risk.

a. I and III only

b. II and IV only

c. I and IV only

d. II and III only

7. A corporation’s first sale of equity made available to the public is called a(n):

a. share repurchase program.

b. private placement.

c. initial public offering (IPO).

d. seasoned equity offering (SEO).

8.Standard deviation measures _____ risk.

a. total

b. nondiversifiable

c. unsystematic

d. systematic

9.The fixed costs of a project are $8,000. The depreciation expense is $3,500

and the operating cash flow is $20,000. What is the degree of operating leverage for this project?

a. .40

b. .71

c. .87

d. 1.40

10.Your firm purchased a warehouse for $335,000 six years ago. Four years ago,

repairs were made to the building which cost $60,000. The annual taxes on the property are $20,000. The warehouse has a current book value of $268,000 and a market value of $295,000. The warehouse is totally paid for and solely owned by your firm. If the company decides to assign this warehouse to a new project, what value, if any, should be included in the initial cash flow of the project for this building?

a. $268,000

b. $295,000

c. $395,000

d. $515,000

11.M&M Proposition I with taxes( case II ) is based on the concept that:

a. the optimal capital structure is the one that is totally financed with equity.

b. the capital structure of the firm does not matter because investors can use