FINANCIAL MANAGEMENT -

Which of the following positions typically reports to the chief financial officer (CFO)? VP of Operations Procurement Officer Controller VP of Marketing

Controller

Which of the following is an example of an agency cost? Labor Costs Fees of outside auditors Sales Commissions Raw Materials

Fees of outside auditors

Which of the following is one of the primary functions of the financial manager? Preparing financial statements Calculating payroll deductions Oversight of factory production Making financing decisions

Making financing decisions

Which of the following is one of the primary questions addressed by financial managers? Which accounting firm should be used to prepare the financial statements? What benefit package should the firm offer in order to attract good employees? What is the impact of an increase in marketing efforts on production? Which projects should the firm invest resources in to increase shareholder wealth?

Which projects should the firm invest resources in to increase shareholder wealth?

The market price of a share of stock is determined by: the chief financial officer and the CEO the Federal Reserve the New York Stock Exchange investors buying and selling the stock

investors buying and selling the stock

Financial managers should undertake investment opportunities when the __________. marginal cost is greater than the marginal benefit marginal benefit is greater than the marginal cost marginal benefit is at least twice as much as the marginal cost

marginal benefit is greater than the marginal cost

The fraction of the next dollar of income that you will pay in taxes is referred to as the __________. ordinary tax rate average tax rate marginal tax rate

marginal tax rate

The primary goal of the financial manager is to: minimize costs maximize stakeholder wealth maximize shareholder wealth maximize profits

maximize shareholder wealth

Capital structure refers to the: the shape of the firm's headquarters investment in current assets by the firm mix of investments picked by the firm mix of the firm's long-term sources of financing

mix of the firm's long-term sources of financing

Income that is earned through the sale of a firm's goods and/or services is known as __________. infrequent revenue capital gains ordinary income

ordinary income

When a manager makes a poor decision that is not in the shareholders' best interest it will be: reported in all the major news outlets. reflected in the stock price. publicly acknowledged.

reflected in the stock price.

Financial managers __________ when making decisions because it can have a direct impact on shareholder wealth. should always engage in ethical behavior undertake a cost-benefit analysis of the ethical choice weigh criminal penalties against the corporate benefits should pay bribes to obtain key contracts

should always engage in ethical behavior

A disadvantage of a partnership is __________. unlimited liability limited liability ease of raising funds double taxation

unlimited liability

One of the primary tasks of the financial manager is to manage short-term cash needs, which is known as: capital structure capital budgeting working capital management investing

working capital management

Which of the following best describes the concept of the time value of money? Investors who want to earn higher returns must be willing to accept greater risk. A dollar today is worth more than a dollar in the future. Cash is king. Incentives are important.

A dollar today is worth more than a dollar in the future.

If a firm pays $230,200 in taxes on $1,110,000 in income that firm's average tax rate is __________. 20.7% 4.8% $230,200

20.7%

The U.S. Congress passed legislation in 2002 that holds corporate managers personally responsible for the firm's financial disclosures and decisions. This law is known as the __________. Gramm-Leach-Bliley Act Sarbanes-Oxley Act Gramm-Rudman-Hollings Act

Sarbanes-Oxley Act

If the managers of a company are not the owners of the company, they are considered: insiders directors shareholders agents

agents

When a firm has agency problems, the stock price is often depressed, which makes the firm: an attractive takeover candidate. maximize shareholder wealth. issue additional debt.

an attractive takeover candidate.

The process of evaluating long-term investment opportunities for the firm, and then determining which ones the firm should invest in is known as: hedging capital structure working capital management capital budgeting

capital budgeting

Financial managers are more concerned with a firm's __________ than a firm's earnings per share when evaluating a potential acquisition. cash flows dividend payment cash on hand debt service

cash flows

A firm's chief accountant that is responsible for all accounting activities is known as the __________. controller chief financial officer treasurer

controller

The set of rules, processes and laws that dictate how a firm is controlled, operated and regulated is known as __________. shareholder wealth maximization corporate governance stakeholder theory

corporate governance

A __________ is a form of business organization that is a separate legal entity from its owners and has limited liability. corporation partnership professional group sole proprietorship

corporation

The science and art of managing money is known as __________. finance managerial finance personal finance

finance

The manager responsible for monitoring and managing the firm's exposure to loss from currency fluctuations is the: hedge analyst currency manipulation manager foreign investment analyst foreign exchange manager

foreign exchange manager