Chapter 1 Connect Hw

3. Which of the following terms is defined as a conflict of interest between the corporate shareholders and the corporate managers? a. Articles of incorporation. b. Corporate breakdown. c. Agency problem. d. Bylaws. e. Legal liability

Agency problems.

1. Which of the following terms is defined as the management of a firm's long-term investments? a. Working capital management. b. Financial allocation. c. Agency cost analysis. d. Capital budgeting. e. Capital structure.

Capital budgeting

2. Which of the following is defined as a firm's short-term assets and its short-term liabilities? a. Working capital. b. Debt. c. Investment capital. d. Net capital. e. Capital structure.

Working capital.

5. Which of the following is a capital budgeting decision? a. Determining how many shares of sock to issue. b. Deciding whether or not to purchase a new machine for the production line. c. Deciding how to refinance a debt issue that is maturing. d. Determining how much inventory to keep on hand. e. Determining how much money should be kept in the checking account.

b. Deciding whether or not to purchase a new machine for the production line.

10. Which of the following is a working capital management decision? a. determining the amount of equipment needed to complete a job. b. Determining whether to pay cash for a purchase or use the credit offered by the supplier. c. Determine the amount of long-term debt requires to complete a project. d. Determining the number of shares of stock to issue to fund an acquisition. e. Determining whether or not a project should be accepted.

b. Determining whether to pay cash for a purchase or use the credit offered by the supplier.

7. Which one of the following is a capital structure decision? a. Determining which of two projects to accept. b. Determining how to allocate investment funds to multiple projects. c. Determining the amount of funds needed to finance customer purchases of a new product. d. Determining how much debt should be assumed to fund a project. e. Determining how much inventory will be needed to support a project.

d. Determining how much debt should be assumed to fund a project.

9. Which of the following accounts are included in working capital management? I. Accounts Payable II. Accounts Receivable III. Fixed Assets IV. Inventory a. I and II only. b. I and III only. c. II and IV only. d. I, II, and IV only. e. II, III, and IV only.

d. I, II, and IV only.

4. A stakeholder is: a. A person who owns shares of stock. b. Any person who has voting rights based on stock ownership of corporation. c. A person who initially founded a firm currently has management control over that firm. d. A creditor to whom a firm currently owes money. e. Any person or entity other than a stockholder or creditor who potentially has a claim on the cash flows of a firm.

e. Any person or entity other than a stockholder or creditor who potentially has a claim on the cash flows of a firm.

8. The decision to issue additional shares of stock is an example of which one of the following? a. Working capital management. b. Net working capital decision. c. Capital budgeting. d. Controller's duties. e. Capital structure decision.

e. Capital structure decision.

6. Which of the following should a financial manager consider when analyzing a capital budgeting project? I. Project start-up costs. II. Timing of all projected cash flows. III. Dependability of future cash flows. IV. Dollar amount of each projected cash flow. a. I and IV only. b. I, II, and IV only. c. I, II and III only. d. II, III, and IV only. e. I, II, III, and IV.

e. I, II, III, and IV.