Chapters 1 and 2 Questions- Principles of Finance from texbook 14e

·         CHAPTER 1 QUESTIONS: 1-2, 1-6, 1-7, 1-9

·         CHAPTER 2 PROBLEMS:  2-3, 2-5

1-2  Question- What are the three principal forms of business organization? What are the advantages and disadvantage of each?

1-6 Question- What are the financial intermediaries and what economics function do they perform?

1-7 Question- Is an initial public offering and example of a primary or secondary market transaction?

1-9 Question- Identify and briefly compare the two leading stock exchange in the United States today?

2-3 question- Income Stament

Molteni Motors Inc. Recently reported 6 million of net income. It’s EBIT was 13million, and its tax rate was 40%. What was its interest expense? Hint: Write out the hearings for and income statement, and then fill in the know values, Then divide 6 million net income by 1 – T = 0.6 to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense. Use this procedure to work some of the other problem.)

2-5 Question- Net cash flow

Kendall Corners Inc. Recently reported net income of $3.1 million and depreciation of $500,000. What was its net cash flow? Assume it has amortization expense.