Questions from Corporate Finance

Q: What is treasury stock?

What is treasury stock?

Q: How is net income computed?

How is net income computed?

Q: What accounting events trigger changes to the retained earnings account?

What accounting events trigger changes to the retained earnings account?

Q: How do increases in fixed assets from one period to the next

How do increases in fixed assets from one period to the next affect cash holdings for the firm?

Q: Name two working capital accounts that represent sources of cash for the

Name two working capital accounts that represent sources of cash for the firm?

Q: Explain the difference between cash flows from financing and investing activities?

Explain the difference between cash flows from financing and investing activities?

Q: How does the calculation of net income differ from the calculation of

How does the calculation of net income differ from the calculation of cash flow to investors from operating activity?

Q: All else being equal, if a firm increases its accounts payable

All else being equal, if a firm increases its accounts payable, what effect will this have on cash flow to investors?

Q: When determining the real interest rate, what happens to businesses that

When determining the real interest rate, what happens to businesses that find themselves with unfunded capital projects whose rate of return exceeds the cost of capital?

Q: Why is it important to consider the consequences of taxes when financing

Why is it important to consider the consequences of taxes when financing a new project?