FINA 365 Exam 1 with Practice Questions and Answers, Exams of Finance

FINA 365 Exam 1 with Practice Questions and Answers Capital Budgeting ANSWER✓✓ the process of planning and managing a firm's investments in fixed assets Capital Structure ANSWER✓✓ a mix of debt and equity used in the firm Working Capital Management ANSWER✓✓ managing short-term assets and liabilities Agency Problems ANSWER✓✓ the conflict of interest between principal and agent. when managers put their own self-interest ahead of the interests of the shareholders Mitigating Agency Problem ANSWER✓✓ creating incentives for the agent to ensure they act as the principal wants Financial statements ANSWER✓✓ accounting reports issued periodically that present past performance information Balance Sheet ANSWER✓✓ snap shot of the firm's assets and liabilities at a given point in time Liquidity ANSWER✓✓ ease of conversion to cash without significant loss of value