This exam was developed to enable schools to award credit to students for knowledge equivalent to that learned by students taking the course. This exam covers topics such as financial statements and planning, time value of money, working capital management, cost of capital, capital budgeting, etc.
The use of a nonprogrammable calculator is permitted during this exam
The exam consists of 100 multiple-choice questions to be completed in 2 hours.
Sample Principles of Finance Questions:
Want to know what the test is like? Here are 5 sample questions:
1. Which of the following statements is true about a stock split?
a. It increases equity
b. It decreases assets
c. It increases retained earnings
d. It decreases the par value of the stock
2. When a firm pays a cash dividend, the firm’s balance sheet is affected in which of the following ways?
a. Assets and equity remain the same
b. Assets decrease and equity increases
c. Assets and liabilities decrease
d. Assets and equity decrease
3. The degree of financial leverage measures the responsiveness of
a. Earnings to changes in operating expenses
b. Earnings to changes in output
c. Earnings before taxes to changes in operating income
d. Operating income to changes in net income
4. In linear break-even analysis, a decrease in fixed costs, if other factors remain constant, will cause the
break-even point and the degree of operating leverage to do which of the following?
a. Increase decrease
b. Decrease decrease
c. Decrease increase
d. Increase increase
5. Which of the following terms of trade credit is most favorable for the buyer?
a. 2/15 net 30
b. 2/15 net 45
c. 3/10 net 30
d. 3/15 net 45
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