FIN 2800 Study Guide - Final Guide: Economic Order Quantity, Financial Statement Analysis, Cash Conversion Cycle

• School: University of Denver
• Department: Finance
• Course: FIN 2800
• Professor: Andrew Sherbo

Document Summary

Exam chapters: 5, 10, 11, 13, 14, 15: 20-25 multiple choice, 4-5 free response problems. Capital budgeting the process of evaluating and selecting long-term investments that are consistent with the firm"s goal of maximizing owner wealth: most common long term investments are in fixed assets. [property, land, equipment: these assets are often referred to as earning assets and generally provide the basis for the firm"s earning power and value, firms treat capital budgeting (investment) and financing decisions separately. Operating expenditure an outlay of funds by the firm resulting in benefits received within one year. Capital budgeting process a process composed of five distinct, interrelated steps. Implementation expenditures are made and projects are implemented following approval. expected. Step 2 & 3: review & analysis, decision making consume the majority of time and effort. Independent projects projects whose cash flows are unrelated to (independent of) one another; the acceptance of one does not eliminate the others from further consideration.