FIN 504 Final Exam Answers

____ are obligations of the U.S. Treasury with common maturities of one to seven years and that are generally issued in minimum denominations of 5,000.

A.

Treasury notes

B.

Treasury bills

C.

Federal agency issues

D.

Banker's acceptances

The firm's financing requirements can be separated into

A.

current liabilities and long-term funds

B.

current assets and fixed assets

C.

current liabilities and long-term debt

D.

seasonal and permanent

Debt is generally the least expensive source of capital. This is primarily due to

A.

fixed interest payments

B.

its position in the priority of claims on assets and earnings in the event of liquidation

C.

the tax deductibility of interest payments

D.

the secured nature of a debt obliga

The...