question In a Common Size Income Statement each line item is expressed as a percentage of

What is the primary focus of financial management in a business?

A. Maximizing profits
B. Maximizing shareholder wealth
C. Minimizing costs
D. Achieving market dominance

What is the term for the rate of return on an investment before accounting for taxes and inflation?

A. Nominal Return
B. Real Return
C. Total Return
D. After-Tax Return

What term refers to the use of debt to increase the return on equity?

A. Cost of Capital
B. Leverage
C. Capital Structure
D. Financial Modeling

Which financial decision involves determining the optimal mix of debt and equity for a company?

A. Working Capital Management
B. Capital Budgeting
C. Capital Structure
D. Cash Flow Management

Which financial institution acts as the lender of last resort, providing financial support to banks and managing monetary policy?

A. Foreign Exchange
B. Central Bank
C. Investment Bank
D. Hedge Fund

What term describes the deliberate act of arranging financial affairs to pay the least amount of tax possible?

A. Tax Compliance
B. Tax Evasion
C. Tax Planning
D. Tax Refund

What term refers to the analysis of an investment's potential returns in relation to its level of risk?

A. Profit Maximization
B. Risk Management
C. Financial Planning
D. Investment Returns

What aspect of personal finance involves strategically managing and reducing outstanding student loans?

A. Student Loans
B. Debt Reduction
C. Investment Management
D. Credit Score Improvement

What does the Times Interest Earned (TIE) Ratio assess?

A. Liquidity of current assets
B. Profitability of the company
C. Ability to cover interest payments with operating income
D. Solvency of the company

Which tax is imposed on the income generated by corporations and businesses?

A. Income Tax
B. Sales Tax
C. Corporate Tax
D. Property Tax