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BUS 401 week 1 Complete

Work (Assignment – Dqs And Quiz) Latest 2013 A+ Work

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Week one assignment: Financial Management Challenges and Ethics

name


BUS 401 Principles of Finance

Instructor James York

June 24, 2013

BUS 401 Week 1 DQ 1 (The Role of Financial Management in a Firm)

BUS 401 Week 1 DQ 2 (Financial Statements)

1.Question :

The financial goal of a for-profit business is:

Student Answer:

profit maximization.

owner wealth maximization. cash flow maximization. utility maximization. Instructor The answer can be found in the Explanation: introduction to Chapter 1. Points Received: Comments:

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2.Question :

Suppose two investments produce the same expected cash flows. We would assign a higher value to the investment with:

Student Answer:

lower risk. higher cash flow variability.


higher risk. the highest possible cash flows under ideal conditions. Instructor The answer can be found in Section Explanation: 1.1: Valuation. Points Received: Comments:

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3.Question :

Opportunity costs can vary over time and:

Student Answer:

are almost always close to 10%.

represent the highest possible return you can earn on an investment. are always based on the interest rate offered on bank savings accounts. set a return that other investments must equal or exceed to be attractive. Instructor The answer can be found in Section Explanation: 1.1: Valuation. Points Received: Comments:

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Time is a factor when determining the value of a possible investment. 4.Question : As investors, all else being equal, we value investments: Student more the longer we have to wait for Answer: the payoff. less the longer we have to wait for the payoff. with predefined wait times for payoff. regardless of time because a dollar is always a dollar. Instructor The answer can be found in Section Explanation: 1.1: Valuation.


Points Received: Comments:

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5.Question :

An investment, such as a bond, will have a higher expected return (or yield) if it:

Student Answer:

has a higher purchase price.

holds a higher rating, such as AAA or AA. carries greater risk. has been issued by a well-known company. Instructor The answer can be found in Section Explanation: 1.1: Valuation. Points Received: Comments:

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The value of an asset is based on four characteristics—cash flows, 6.Question : time, risk, and opportunity costs— but in many situations we can estimate an asset’s value by: Student ignoring risk, which simplifies the Answer: calculation. assigning our personal value to the asset. adding a risk premium to the current return on US government bonds. looking at its market price. Instructor The answer can be found in Section Explanation: 1.2: Markets. Points Received: Comments:

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7.Question :

Over the past 50 years, stocks listed on the NYSE (New York Stock Exchange) have:

Student Answer:

returned a very steady 12% per year.

never had a single year with a negative return. never been overpriced or underpriced. had annual returns ranging from negative 30% to over positive 30%. Instructor The answer can be found in Section Explanation: 1.2: Markets. Points Received: Comments:

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8.Question :

The accounting method you use in your checkbook is best described as:

Student Answer:

cash accounting.

accrual accounting. deficit reduction. balance sheet accounting. Instructor The answer can be found in Section Explanation:2.1: A Review of Accounting. Points Received: Comments:

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On the typical balance sheet, the right-hand side shows: Student the book value of plant, property, Answer: and equipment. the market value of liabilities. the accounting value of liabilities and equity. the market value of common stock Instructor The answer can be found in Section Explanation: 2.2: A Review of Financial

9.Question :


Statements. Points Received: Comments:

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To arrive at a more accurate 10 estimate of cash flow we would add Question : . depreciation expense to net income. The next step would be to: Student reduce our estimate by the increases Answer: in liabilities. reduce our estimate by the decreases in assets increase our estimate by the increases in liabilities. do nothing more because we have an accurate estimate. The answer can be found in Section Instructor 2.4: Translating Accounting Profits Explanation: Into Cash Flows. Points Received:

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Bus 401 week 1 complete work