Question

Question 2

Which of these would increase in the net cash flow to the company?

a)             Increasing inventory by $100,000

b)             Selling bonds

c)              Decreasing sales

d)             None of the above would increase the net cash flow

Question 6

Agency theory is of most concern in what type of business structure?

a)             Sole proprietorship

b)             Partnership

c)              Corporation

d)             In all three equally

Question 8

Calculated free cash flow considers each of these except

a)             Cash from operating activities

b)             Cash from investing activities

c)              Dividends paid to stockholders

d)             Capital expenditures

Question 9

Which of these does not represent an outflow of cash for the company?

a)             Interest expense

b)             Dividends paid to common shareholders

c)              Depreciation expense

d)             Taxes

Question 11

Which of these financial statements provides information on a company’s total liabilities (debt)?

a)             Income statement

b)             Balance sheet

c)              Statement of Cash Flows

d)             None of the above

Question 12

Which of these would increase a company’s current ratio?

a)             Increasing total assets by 10%

b)             Increasing current liabilities by 10%

c)              Decreasing current assets by 20%

d)             None of the above

Question 13

Which of the following has not historically been a part of the study of finance?

a)             Mergers and acquisitions

b)             Making accounting entries

c)              Raising capital

Answer 1

Question 2) Option B: Selling Bonds

By selling bonds company can increase its cash flow from investing activities which will increase net cash flow.

Question 6) option C:Corporation

Agency relationship occurs between shareholders and company executives in Corporation. Since in sole proprietorship and partner ship firms shareholders and company executive are same.

Question 8) option C:Dividend paid to Shareholders

Free Cash flow has following parts

Cash from Operation activities:the cash flow statement illustrates the cash your business received and used during normal operating activities.

Cash from Investment activities:All of your company's investments are listed under this category

Capital Expenditure:

Question 9) option C:Depreciation expenses

Depreciation spreads the expense of a fixed asset over the years of the useful life of that asset. Depreciation helps companies avoid taking a huge deduction in the year the asset is purchased, allowing companies to earn revenue from the asset.