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FINC 4331 Final Exam (CEC Certification) Questions with Complete Solutions

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FINC 4331 Final Exam (CEC Certification) Questions with Complete Solutions ABC corp has encountered financial difficulty in the past year and experienced substantial management turnover during that... time. Although loan payments remain current and the bank has attempted to work with the new management team to identify causes of the performance problems, the company has decided to file bankruptcy. Which of the following effects of the bankruptcy is LEAST likely to affect the bank? -Answer- monthly loan payments prior to the filing must be returned All of the following are reasons why bankers use tax returns when preparing a global cash flow EXCEPT: -Answer- the tax return will likely show the highest amount of earned profit compared to a financial statement All of the following statements are part of the definition of global cash flow EXCEPT: -Answer- the tool provides a roadmap that addresses all situations Analysts refer to the Form W-2 to determine personal cash flows when the client is -Answer- employee of a corporation The basis for reporting assets on personal financial statements is -Answer- current fair market value As part of analyzing a problem loan, a banker will complete all of the following steps EXCEPT: -Answer- Hire a turnaround consultant A bridge loan typically displays which of the following characteristics? -Answer- Repayment of the sale of equipment or real estate for example with a term of one year or less CF from items reported on page 1 of the Form 1040 includes which of the following -Answer- unemployment compensation Cheap Stuff, ltd. is a distributor of goods to discount stores. The company has experienced 12% sales growth over the last three years. Despite continued economic declines projected, the company is forecasting continued sales growth of 10-15% each year over the next 3 years. Which of the following sources of financing would be most appropriate to support related increases in receivables and inventory? -Answer- revolving line of credit The covenants of a loan agreement should serve which of the following purposes? -Answer- They enable the bank to spot signs of deterioration and provide a means of communication with the borrower [Show More]

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