financial management 6874539 2

 

Financial Management

 

CHAPTER 1 QUESTIONS: 1-2, 1-6, 1-7, 1-9

 

What are the three principal forms of business organization? What are the advantages and disadvantages of each?

 

What are financial intermediaries, and what economic functions do they perform?

 

Is an initial public offering an example of a primary or secondary market transaction?

 

Identify and briefly compare the two leading stock exchanges in the United States today.

 

CHAPTER 2 PROBLEMS:  2-3, 2-5

 

Molteni Motors Inc, recently reported $6million of net income. Its EBIT was $13 million and its tax rate was 40%. What was the interest expense? ( Hint: Write out the headings for an income statement, and then fill in the known values. Then dived $6 million net income net income by 1-T = 0.6 to find the pretax income. The difference between EBIT and taxable income must be the interest expense. Use this procedure to work some of the other problems.)

 

Kendal Corner Inc. recently reported a net income of $3.1 million and depreciation of $500.000. What was its net cash flow? Assume it had no amortization expense.