Managerial Finance

MANAGERIAL  FINANCE:  FIN 350

Fall Semester 2014

SECTION FOUR  EXAM

Exam Due Date:  Thursday, Dec. 18, at 11:59 p.m.

Exam Includes:

Chapter Ten:  Capital Budgeting Techniques

Chapter Eleven:  Capital Budgeting Cash Flows and Risk Refinements

Chapter Four:  Cash Flow and Financial Planning (Depreciation Section)

Name:  __Tyler Johnson________________________________

Instructions:  You may complete the exam by typing in the answers of your choice into the Microsoft Word file containing this exam:  Exam_Four_FIN_350_Fall _2014.  Then, save this file.  You may then place this exam in the “Exam Four” Drop Box at our course Web site.  Please complete the exam any time prior to the due date noted in the heading above.  The exam is “open book”, so you may use our textbook, our assignments, and any references that you wish when completing the exam.  However, please work on the exam individually, as it is designed to test your knowledge of the material that we have covered.  Please contact me at my E-mail address or by phone if you have any questions about this procedure.  Thank you!

A.  TRUE / FALSE QUESTIONS

        Enter “True” or “False” on the blank preceding each question.

__False____  1.  Non-cash charges, such as “Depreciation Expense,” are expenses that require an actual outlay of

                                cash during the period, but are not deducted on the income statement.

True______  2.  A firm with limited funds for investment in capital assets must ration those funds by allocating

                                them to projects that will maximize shareholders’ value.

_True_____  3.  If a firm has unlimited funds to invest in capital assets, all independent projects that meet its

                                minimum investment criteria should be implemented.

_True_____  4.  The following three projects would seem to compete with one another for the firm’s resources

                                and therefore would be examples of mutually exclusive projects:  1)  installing air conditioning

                                in the production facility; 2) acquiring a firm that supplies the firm’s raw materials; and

                                3) purchasing a new computer system.