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True False 1. IF General Motors needed external funds to build 3 new plants, they would most likely go to an investment banking 2. Responsibilities of a financial staff would include: forecasting, financing decisions, and managing risk 3. The goal of financial management is to macimize the current value per share of the existing stock 4. A mature company has more of a tendency to pay a higher dividend. 5. Microsoft is a growth stock that pays small dividends relative to the overall market. Investors purchase the stock for capital appreciation, not the dividend. 6. If Dupont wanted to build a new plant in Brazil, it would go to primary markets to raise capital. 7. Due to company problems originating from Euron and World Com, Wall Street now focuses more on EBITDA 8. When we speak in reference to leverage, we are making reference to a company's capital structure. 9. A capital budget focuses on a firm's balance sheet, and an operating budget focuses on the income statement 10. Profit maximization equals stock price maximization 11. Factors that affect stock price include projected cash flows, timing of cash flows and riskless nature of cash flows. 12. Operating margin % equals EBITDA%. 13. Large increases in accounts receivables, inventories, and depreciation can damage a corporations working capital. 14. The use of more leverage can sometimes be a good financial strategy 15. Ending balances for the statement of retained carnings nets out dividends, equity, and net income for the period. 16. If a company isn't paying their accounts payables on time, there is a good chance they have cash flow problems 17. If Ford increased its credit terms from 45 days to 60 days due to intense competition, its accounts receivables would most likely decrease and Ford's cash levels would increase 18. I FEDEX begins to depreciate its fixed assets over 5 years versus the current 10 year policy, not find assets on the balance sheet will decline, and net income on the income statement will decline 19. Lf profits are increasing, most financial statement analysis ratios benefit 20. If accounts payable totals are decreasing rapidly, your liquidity position could be detioning

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