MGMT 304 Exam 1
Which one of the following best illustrates that the management of a firm is adhering to the goal of financial management?
An increase in the market value per share
Which one of the following terms is defined as the management of a firm's long-term investments?
Capital budgeting
Which one of the following represents a cash outflow from a corporation?
Payment of dividends
Which one of the following is a cash flow from a corporation into the financial markets?
Payment of loan interest
The decision to issue additional shares of stock is an example of:
a capital structure decision.
A business created as a distinct legal entity and treated as a legal "person" is called a(n):
corporation.
One disadvantage of the corporate form of business ownership is the:
double taxation of distributed profits.
The primary advantage of being a limited partner is:
the partner's maximum loss is limited to their capital investment.
When evaluating the timing of a project's projected cash flows, a financial manager is analyzing:
when each cash flow is expected to occur.
A firm's short-term assets and its short-term liabilities are referred to as the firm's:
working capital.
Which one of the following is an agency cost?
Hiring outside accountants to audit the company's financial statements
Which one of the following is a primary market transaction?
Sale of a new share of stock to an individual investor
Financial managers should strive to maximize the current value per share of the existing stock to:
best represent the interests of the current shareholders.
A business formed by two or more individuals who each have unlimited liability for all of the firm's business debts is called a:
general partnership.
capital structure decisions include determining:
how much debt should be assumed to fund a project.
The growth of both sole proprietorships and partnerships is frequently limited by the firm's:
inability to raise cash.
A business partner whose potential financial loss in the partnership will not exceed his or her investment in that partnership is called a:
limited partner.
A business owned by a solitary individual who has unlimited liability for the firm's debt is called a:
sole proprietorship.
Working capital management decisions include determining:
the minimum level of cash to be kept in a checking account.