finance exam 1 review

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 terms is defined as the mixture of a firm's debt and equity financing?

capital stucture

the cash flow related to interest payments less any net new borrowing is called the

cash flow to creditors

a business created as a distinct legal entity and treated as a legal "person" is called a

corporation

cash flow from assets is also known as the firm's

free cash flow

a limited partnership

has at least one partner who has unlimited liability for all of the partnership's debts

capital structure decisions include determining

how much debt should be assumed to fund a project

which one of the following questions is a working capital management decision?

how much inventory should be on hand for immediate sale

which one of the following is excluded from the cash flow from assets?

interest expense

a general partner:

is personally responsible for all partnership debts

a business partner whose potential financial loss in the partnership will not exceed his or her investment in the partnership is called a

limited partner

which of the following functions should be the responsibility of the controller rather than the treasurer?

processing cost reports

a business owned by a solitary individual who has unlimited liability for the firm's debt is called a

sole propietorship

working capital management decisions include determining

the minimum level of cash to be kept in a checking account

the treasurer of a corporation generally reports directly to the

vice president

an example of a capital budgeting decision is deciding

whether or not to purchase a new machine for the product line

a firm's short term assets and its short term liabilities are referred to as the firm's

working capital