Finance for Managers
Study Guide Questions
Course Introduction
Finance for Managers provides a practical foundation in financial concepts and tools essential for effective decision-making in business settings. The course covers key topics such as financial statement analysis, budgeting, time value of money, capital budgeting, risk assessment, and the principles of financing and investment. Emphasis is placed on understanding how financial information informs strategic and operational decisions, with real-world examples designed to help managers interpret data, allocate resources efficiently, and evaluate the impact of their actions on organizational financial health.
Recommended Textbook M Finance 4th Edition by Marcia Cornett
Available Study Resources on Quizplus
14 Chapters
1727 Verified Questions
1727 Flashcards
Source URL: https://quizplus.com/study-set/3409
Page 2
Chapter 1: Introduction to Financial Management
Available Study Resources on Quizplus for this Chatper
71 Verified Questions
71 Flashcards
Source URL: https://quizplus.com/quiz/67716
Sample Questions
Q1) A metaphor used to illustrate how an individual pursuing his own interests also tends to promote the good of the community.
A) agency theory
B) angel investor
C) invisible hand
D) perks or perquisites
Answer: C
Q2) The most commonly accepted groups of asset classes include all of the following except A) stocks.
B) bonds.
C) machinery and equipment.
D) real estate.
Answer: C
Q3) Outside parties that monitor the firm include all of the following EXCEPT A) credit agencies.
B) the New York Stock Exchange.
C) analysts.
D) bankers.
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Reviewing Financial Statements
Available Study Resources on Quizplus for this Chatper
125 Verified Questions
125 Flashcards
Source URL: https://quizplus.com/quiz/67715
Sample Questions
Q1) Night Scapes,Corp.began the year 2018 with $10 million in retained earnings.The firm suffered a net loss of $2 million in 2018 and yet paid $2 million to its preferred stockholders and $1 million to its common stockholders.What is the year-end 2018 balance in retained earnings for Night Scapes?
A) $5 million
B) $8 million
C) $9 million
D) $15 million
Answer: A
Q2) All of the following are cash flows from financing EXCEPT a(n)
A) increase in accounts payable.
B) issuing stock.
C) stock repurchases.
D) paying dividends.
Answer: A
Q3) Which of the following is an example of a capital structure?
A) 15 percent current assets and 85 percent fixed assets
B) 10 percent current liabilities and 90 percent long-term debt
C) 20 percent debt and 80 percent equity
Answer: C
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Analyzing Financial Statements
Available Study Resources on Quizplus for this Chatper
134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/67714
Sample Questions
Q1) You are considering a stock investment in one of two firms (A and B), both of which operate in the same industry. A finances its $20 million in assets with $18 million in debt and $2 million in equity. B finances its $20 million in assets with $2 million in debt and $18 million in equity. Calculate the debt-to-equity ratio for the two firms.
A) Firm A: 9 times; Firm B: 1.11 times
B) Firm A: 19 times; Firm B: 0.11 times
C) Firm A: 9 times; Firm B: 0.11 times
D) Firm A: 19 times; Firm B: 1.11 times
Answer: C
Q2) Which type of ratio measures a firm's ability to pay off short-term obligations without relying on inventory sales?
A) cash
B) current
C) internal-growth
D) quick or acid-test
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Time Value of Money 1: Analyzing Single Cash Flows
Available Study Resources on Quizplus for this Chatper
153 Verified Questions
153 Flashcards
Source URL: https://quizplus.com/quiz/67713
Sample Questions
Q1) Suppose a U.S.Treasury bond promises to pay $9,780.13 in three years.If bonds of this type are generating a 4 percent annual return,how much would you pay for this bond today?
A) $8,429.71
B) $11,001.32
C) $8,694.50
D) $9,112.78
Q2) The process of figuring out how much an amount that you expect to receive in the future is worth today is called
A) discounting.
B) multiplying.
C) compounding.
D) computing.
Q3) What is the future value of $2,000 deposited for one year earning 6 percent interest rate annually?
A) $120
B) $2,000
C) $2,120
D) $4,120
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Time Value of Money 2: Analyzing Annuity Cash
Flows
Available Study Resources on Quizplus for this Chatper
156 Verified Questions
156 Flashcards
Source URL: https://quizplus.com/quiz/67712
Sample Questions
Q1) If the future value of an ordinary,11-year annuity is $5,575 and interest rates are 5.5 percent,what is the future value of the same annuity due?
A) $5,619.52
B) $5,769.06
C) $5,881.63
D) $5,947.88
Q2) What is the present value of a $775 annuity payment over six years if interest rates are 11 percent?
A) $3,017.84
B) $3,119.67
C) $3,202.92
D) $3,278.67
Q3) Compounding monthly versus annually causes the interest rate to be effectively higher,and thus the future value
A) grows.
B) decreases.
C) is independent of the monthly compounding.
D) is affected only if the calculation involves an annuity due.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Understanding Financial Markets and Institutions
Available Study Resources on Quizplus for this Chatper
114 Verified Questions
114 Flashcards
Source URL: https://quizplus.com/quiz/67711
Sample Questions
Q1) Which of the following statements is correct?
A) According to the unbiased expectations theory, the return for holding a two-year bond to maturity is equal to the nominal rate divided by the real interest rate.
B) The rate on a 10-year Corporate bond can never be less than the rate on a 10-year Treasury.
C) We usually observe the inverted yield curve.
D) The rate on a three-year Treasury can never be less than the rate on a 15-year Treasury.
Q2) Which of these feature debt securities or instruments with maturities of one year or less?
A) money markets
B) primary markets
C) secondary markets
D) over-the-counter stocks
Q3) All of the following are common shapes for the yield curve EXCEPT
A) elliptical.
B) upward-sloping.
C) flat.
D) inverted.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Valuing Bonds
Available Study Resources on Quizplus for this Chatper
131 Verified Questions
131 Flashcards
Source URL: https://quizplus.com/quiz/67710
Sample Questions
Q1) Determine the interest payment for the following three bonds: 5.5 percent coupon corporate bond (paid semi-annually),6.45 percent coupon Treasury note,and a corporate zero coupon bond maturing in 10 years.(Assume a $1,000 par value.)
A) $5.50, $6.45, $0, respectively
B) $27.50, $32.25, $0, respectively
C) $27.50, $32.25, $100, respectively
D) $55.00, $64.50, $0, respectively
Q2) Which of the following statements is correct?
A) There is an inverse relationship between bond prices and bond yields.
B) There is a positive relationship between bond prices and bond yields.
C) There is no relationship between bond prices and bond yields.
D) The relationship between bond prices and bond yields is dependent on the market interest rate.
Q3) Junk bonds are those bonds with a credit rating of:
A) BB and lower.
B) B and lower.
C) BBB and lower.
D) None of the options.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Valuing Stocks
Available Study Resources on Quizplus for this Chatper
119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/67709
Sample Questions
Q1) If on November 26,2017,The Dow Jones Industrial Average closed at 12,743.40,which was down 237.44 that day.What was the return (in percent)of the stock market that day?
A) 0.02 percent
B) +0.02 percent
C) 1.83 percent
D) +1.83 percent
Q2) A preferred stock from DLC pays $3.00 in annual dividends.If the required return on the preferred stock is 9.3 percent,what is the value of the stock?
A) $34.89
B) $32.26
C) $38.49
D) $31.13
Q3) At your discount brokerage firm,it costs $9.95 per stock trade.How much money do you need to buy 100 shares of Ralph Lauren (RL),which trades at $85.13?
A) $8,503.05
B) $8,503.00
C) $8,522.95
D) $9,508.00
To view all questions and flashcards with answers, click on the resource link above.
10
Chapter 9: Characterizing Risk and Return
Available Study Resources on Quizplus for this Chatper
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/67708
Sample Questions
Q1) We commonly measure the risk-return relationship using which of the following?
A) Coefficient of variation
B) Correlation coefficient
C) Standard deviation
D) Expected returns
Q2) Which of the following is the correct ranking from least risky to most risky?
A) Long-term Treasury bonds, stocks, Treasury bills
B) Treasury bills, long-term Treasury bonds, stocks
C) Stocks, long-term Treasury bond, Treasury bills
D) Stocks, Treasury bills, long-term Treasury bonds
Q3) The past five monthly returns for PG Company are 3.25 percent, 1.45 percent,4.35 percent,6.49 percent,and 3.75 percent.What is the average monthly return?
A) 1.366 percent
B) 1.608 percent
C) 3.278 percent
D) 3.858 percent
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Estimating Risk and Return
Available Study Resources on Quizplus for this Chatper
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/67707
Sample Questions
Q1) All of the following are necessary conditions for an efficient market EXCEPT
A) low trading or transaction costs.
B) many buyers and sellers.
C) free and readily available information to market participants.
D) low stock prices.
Q2) Investor enthusiasm causes an inflated bull market that drives prices too high,ending in a dramatic collapse in prices is known as A) behavior finance.
B) efficient market.
C) privately held information.
D) stock market bubble.
Q3) You obtain beta estimates of General Electric from two different online sources and you are surprised to find that they are so different.Which of the following would NOT be a correct explanation for the difference?
A) One source used weekly data and another used monthly data.
B) One source used the S&P 500 for a market proxy and the other used the Dow Jones Industrial Average.
C) One used regression analysis and the other used geometric analysis.
D) All of these choices are correct.
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Calculating the Cost of Capital
Available Study Resources on Quizplus for this Chatper
127 Verified Questions
127 Flashcards
Source URL: https://quizplus.com/quiz/67706
Sample Questions
Q1) Tykes Toys' 8 percent annual coupon bond has 8 years until maturity and the bonds are selling in the market for $988.If the firm's after-tax cost of debt is 11.75 percent,what was the firm's tax rate?
A) 69.87 percent
B) 68.09 percent
C) 31.91 percent
D) 30.13 percent
Q2) Which of the following statements is correct?
A) The WACC measures the before-tax cost of capital.
B) An increase in the firm's marginal corporate tax rate will decrease the weighted average cost of capital.
C) Flotation costs can decrease the weighted average cost of capital.
D) None of the options are correct.
Q3) Which of the following will increase the cost of equity?
A) The firm's share price falls 10 percent.
B) The firm is expected to reduce its dividend.
C) The firm's corporate tax rate increases.
D) None of the options are correct.
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Estimating Cash Flows on Capital Budgeting Projects
Available Study Resources on Quizplus for this Chatper
121 Verified Questions
121 Flashcards
Source URL: https://quizplus.com/quiz/67705
Sample Questions
Q1) Which of the following is NOT included when calculating the depreciable basis for real property?
A) Freight charges for item
B) Sales tax paid for item
C) Financing fees
D) Installation and testing fees
Q2) Your firm needs a machine which costs $500,000,and requires $15,000 in maintenance for each year of its three-year life.After three years,this machine will be replaced.The machine falls into the MACRS three-year class life category.Assume a tax rate of 35 percent and a discount rate of 10 percent.If this machine can be sold for $50,000 at the end of year 3,what is the after-tax salvage value?
A) $12,250.00
B) $17,500.00
C) $32,500.00
D) $45,467.50
To view all questions and flashcards with answers, click on the resource link above.
14
Chapter 13: Weighing Net Present Value and Other Capital
Budgeting
Criteria
Available Study Resources on Quizplus for this Chatper
119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/67704
Sample Questions
Q1) Under what conditions can a rate-based statistic yield a different accept/reject decision than NPV?
A) Independent projects that are evaluated at a high cost of capital.
B) Mutually exclusive projects that are evaluated at a low cost of capital.
C) Any projects that exhibit differences in scale or timing.
D) Mutually exclusive projects that exhibit differences in scale or timing.
Q2) Which of the following tools is suitable for choosing between mutually exclusive projects?
A) NPV
B) IRR
C) MIRR
D) None are suitable
Q3) Which of the following is a technique for evaluating capital projects that tells how long it will take a firm to earn back the money invested in a project?
A) Payback
B) Internal rate of return
C) Net present value
D) Profitability index
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Working Capital Management and Policies
Available Study Resources on Quizplus for this Chatper
137 Verified Questions
137 Flashcards
Source URL: https://quizplus.com/quiz/67703
Sample Questions
Q1) If a firm has a cash cycle of 8 days and an operating cycle of 39 days,what is its average payment period?
A) 47 days
B) 39 days
C) 31 days
D) 8 days
Q2) What must the rate be less than to be worth it to incur a compensating balance of $20,000 in order to get a 2 percent lower interest rate on a one-year,pure discount loan of $200,000?
A) The rate must be less than 78 percent.
B) The rate must be greater than 78 percent.
C) The rate must be greater than 78 percent.
D) The rate must be less than 78 percent.
Q3) Safety stock is referred to as the:
A) excess amounts of fixed assets kept on hand to meet unexpected shocks in demand.
B) excess amounts of accruals used to fund short-term demands for cash.
C) excess amounts of a current asset kept on hand to meet unexpected shocks in demand.
D) none of the options.
To view all questions and flashcards with answers, click on the resource link above.
Page 16