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BUS 401 week 1 Complete

Work (Assignment â&#x20AC;&#x201C; 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:

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:

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:

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.

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5.Question :

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

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:

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:

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 :