Quiz Ch 1 BF

Nishaa has been promoted and is now in charge of all external financing. In other words, she is in charge of: a. capital structure management b. asset allocation c. risk management d. capital budgeting e. working capital management

a. capital structure management

Vera opened a used bookstore and is both the 100 percent owner and the stores manager. Which type of business entity does Vera own if she is personally liable for all the stores debts? a. sole proprietorship b. limited partnership c. corporation d. joint stock company e. general partnership

a. sole proprietorship

Jordan and Carmen created a firm that is a separate legal entity and will share ownership of that firm on a 75/25 basis. Which type of entity did they create if they have no personal liability for the firms debts? a. limited partnership b. corporation c. sole proprietorship d. general partnership e. public company

b. corporation

When conducting a financial analysis of a firm, financial analysts: a. cannot use accounting information as it is historical b. rely solely on accounting information c. frequently use accounting information d. ignore accounting information but do use marketing information e. assume the future will be a repeat of the past as reflected in the firms accounting reports

c. frequently use accounting information

An agency issue is most apt to develop when: a. a firm encounters a period of stagnant growth b. a firm downsizes c. the control of a firm is separated from the firms ownership d. the firms owner is also its key manager e. a firm is structured as a general partnership

c. the control of a firm is separated from the firms ownership

Which of the following functions should be assigned to the corporate treasurer rather than to the controller? a. Data processing b. Cost accounting c. Tax management d. Cash management e. Financial Accounting

d. Cash management

Which one of the following correctly defines a common chain of command within a corporation? a. The controller reports directly to the corporate treasurer b. The treasurer reports directly to the board of directors c. The chief financial officer reports directly to the board of directors d. The credit manager reports directly to the controller e. The controller reports directly to the chief financial officer

e. The controller reports directly to the chief financial officer

Which one of the following functions is generally responsibility assigned to the corporate treasurer? a. cost accounting b. data processing c. corporate taxes d. financial accounting e. capital expenditures

e. capital expenditures

Deandre and Mason both enjoy sunshine, water, and surfboards. Thus, the two friends decided to create a business together renting surfboards, paddle boats, and inflatable devices in California. Deandre and Mason will equally share in the decision making and in the business profits and losses. Which type of business did they create if the both have full personal liability for the firms debts? a. sole proprietorship b. limited partnership c. corporation d. joint stock company e. general partnership

e. general partnership

Capital budgeting includes the evaluation of which of the following? a. size of future cash flows only b. size and timing of future cash flows only c. timing and risk of future cash flows only d. risk and size of future cash flows only e. size, timing, and risk of future cash flows

e. size, timing, and risk of future cash flows