Finance > Final Exam Review > University of Pennsylvania - FINANCE 100Final Review (All)

University of Pennsylvania - FINANCE 100Final Review

Document Content and Description Below

Chapter 1: What are the three types of financial management decisions and what questions are they designed to answer?  Capital budgeting – what long term investments should the company take on?...  Capital structure – how will the company pay for the investments?  Working capital management – how will the company manage the day-to-day financial activities? What are the three major forms of business organization?  Sole proprietorship  Partnership  Corporation What is the goal of financial management? To maximize shareholder value What are agency problems and why do they exist within a corporation?  Agency problem – conflict of interest between principal (stockholders) and agent (managers)  Exist because of different incentives that may be given to managers for meeting a certain point What is the difference between a primary market and a secondary market?  Primary market – buying securities from the company directly  Secondary market – trading securities between other individuals Chapter 2: What is the difference between book value and market value? Which should we use for decision-making purposes?  Book value – historical value of assets, liabilities, equity  Market value – what the value is today (use for decision-making) What is the difference between accounting income and cash flow? Which do we need to use when making decisions?  Accounting incom [Show More]

Last updated: 2 years ago

Preview 1 out of 10 pages

Buy Now

Instant download

We Accept: