Finc Knowledge Exam Chapter Questions 2024 Latest Version Questions And Detailed Answers

BHP Billiton is one of the world's largest mining companies, and accounts receivable make up 21% of its total assets (in 2016). Which of the following companies is most likely to owe BHP Billiton money as part of its accounts receivables? {Ans: steel manufacturer (Would need to regularly buy things like raw ores for processing)}never invest in project with ? lower than ? {Ans: IRR, WACC}Which of the following is NOT an advantage of preferred stock to the owner of preferred stock? {Ans: Preferred stock must be in even-numbered percentages (2%, 4%, etc.)}Why does finance add back depreciation and amortization in its measure of economic returns? {Ans: - depreciation is not a cash expense - economic returns that emphasize cash must add back D&A}Which of the following is true about free cash flow? {Ans: It is for all capital providers (debt and equity) and is tax adjusted}On December 31, 2016, Goodyear Tire and Rubber Company had a multiple of enterprise value to free cash flow of 16.1. Which of the following implied assumptions were likely to be true? {Ans: A discount rate of 9% and 3% growth - Enterprise to free cash flow =