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Bus Finance (ABM_BF12-IIIa-1)
Quiz by Nida Flores
Track each student's skills and progress in your Mastery dashboards
1.The primary goal of the financial manager is
2.Corporate owner's receive realizable return through
3.The wealth of the owners of a corporation is represented by
4. Wealth maximization as the goal of the firm implies enhancing the wealth of
5.The goal of profit maximization would result in priority for
6.Profit maximization as a goal is not ideal because it does NOT directly consider
7. Profit maximization as the goal of the firm is not ideal because
8. Profit maximization fails because it ignores all EXCEPT
9.The key variables in the owner wealth maximization process are
10.Cash flow and risk are the key determinants in share price. Increased cash flow results in ________, other things remaining the same.
11.Cash flow and risk are the key determinants in share price. Increased risk, other things remaining the same, results in
12.Financial managers evaluating decision alternatives or potential actions must consider
13.A financial manager must choose between four alternative Assets: 1, 2, 3, and 4. Each asset costs $35,000 and is expected to provide earnings over a three-year period as described below.
Based on the profit maximization goal, the financial manager would choose
Asset Year 1 Year 2 Year 3
1 $ 21,000 $ 15,000 $ 6,000
2 $ 9,000 $ 15,000 $ 21,000
3 $ 3,000 $ 20,000 $ 19,000
4 $ 6,000 $ 12,000 $ 12,000
14. A financial manager must choose between three alternative investments. Each asset is expected to provide earnings over a three-year period as described below. Based on the wealth maximization goal, the financial manager would
Asset Year 1 Year 2 Year 3
1 $ 21,000 $ 9,000 $ 15,000
2 $ 15,000 $ 15,000 $ 15,000
3 $ 9,000 $ 21,000 $ 15,000
$ 45,000 $ 45,000 $ 45,000