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a financial institution is an intermediary that channels the savings of individuals, businesses, and governments into loans or investments. true/false
which of the following is not a financial institution
newspaper publisher
primary and secondary markets are used for short and long term securities respectively. true/false
an efficient market is one that allocates funds to their most productive use as a result a competition amongst wealth, maximizing investors. true/false
the major securities traded in the capital markets are called
stocks and bonds
the liklihood that managers may place goals ahead of corporate goals called the agency problem. true/false
the accrual method recognizes revenue at the point of sale and recognizes expenses when incurred. true/false
the price/earning ratio represents the degree of confidence that investors have in the firms future performance. true/false
dividend payments change directly with changes in EPS. true/false
free cash flow is the cash flow a firm generates from its normal operations calculates as EBIT- taxes plus depriciation. true/false
the financial manager pllaces primary emphasis on cash flows, the inflow outflow of cash.true/false
a primary market is a financial market in which preowned securities are traded. true/false
the more equity a firm uses in relation to its assets, the higher its financial leverage.true/false
in cash budgeting, the impact of the depreciation is reflected in a reduction in tax payments.true/false
a firm with a total asset turnover lower than the industry standard may have
insufficient sales
in the statement of cash flows, retained earnings are handled through the adjustment of which two accounts
net profits and dividends
the financial leverage multiplier is an indicator of how much blank a corporation is utilizing
total debt
one way often used to insure that management decisions are in the best interest of the stockholders is to
tie management compensation to the performance of the companys common stock
what is an example of cash inflow
net profits after taxes, a decrease in accounts recievable, an increase in accruels
what is an example of cash outflow
an increase in accounts recieveable
in a corporation, the members of the board of directors are elected by the
managerial finance involves tasks such as
budgeting ,financial forecasting, cash management, and funds procurement
cash flows associated with the purchase and sale of fixed assets and business interests are called
investment flows
the blanke measures the percentage of profit earned on each slaes dollar before interest and taxes
operating profit margin
the key role of the financial manager is
decision making
a form with a gross profit margin which meets industry standard and a net profit margin which is below industry standard must have excessive
general and administrative expenses
the statement of cash flos provides a summary of the firms
all cash flow activities
the financial manager is interested in the cash inflows and outflows of the firm, rather than the accounting datam in order to ensure