Which one of the following terms is defined as the management of afirm’s long-term investments? |
capital budgeting |
Which one of the following terms is defined as the mixture of a firm’sdebt and equity financing? |
capital structure |
Which one of the following is defined as a firm’s short-term assets andits short-term liabilities? |
working capital |
A business owned by a solitary individual who has unlimited liability forits debt is called a: |
sole proprietorship |
A business formed by two or more individuals who each have unlimitedliability for all of the firm’s business debts is called a: |
general partnership |
A business partner whose potential financial loss in the partnership willnot exceed his or her investment in that partnership is called a: |
limited partner |
A business created as a distinct legal entity and treated as a legal”person” is called a: |
corporation |
Which one of the following terms is defined as a conflict of interestbetween the corporate shareholders and the corporate managers? |
agency problem |
A stakeholder is: |
any person or entity other than a stockholder or creditor whopotentially has a claim on the cash flows of a firm. |
Which of the following questions are addressed by financial managers?I. How should a product be marketed?II. Should customers be given 30 or 45 days to pay for their credit purchases?III. Should the firm borrow more money?IV. Should the firm acquire new equipment? |
II, III, and IV only |
Which one of the following functions should be the responsibility of thecontroller rather than the treasurer? |
income tax returns |
The controller of a corporation generally reports directly to the: |
vice president of finance |
Which one of the following correctly defines the upward chain ofcommand in a typical corporate organizational structure? |
the treasurer reports to the vice president of finance |
Which one of the following is a capital budgeting decision? |
deciding whether or not to purchase a new machine for theproduction line |
Which of the following should a financial manager consider whenanalyzing a capital budgeting project?I. project start up costsII. timing of all projected cash flowsIII. dependability of future cash flowsIV. dollar amount of each projected cash flow |
I, II, III, and IV |
Which one of the following is a capital structure decision? |
determining how much debt should be assumed to fund aproject |
The decision to issue additional shares of stock is an example of whichone of the following? |
capital structure decision |
Which of the following accounts are included in working capitalmanagement?I. accounts payableII. accounts receivableIII. fixed assetsIV. inventory |
I, II, and IV only |
Which one of the following is a working capital management decision? |
determining whether to pay cash for a purchase or use thecredit offered by the supplier |