BA 323 Connect Ch.1

The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?

Agency

Todd and Cathy created a firm that is a separate legal entity and will share ownership of that firm on a 50-50 basis. Which type of entity did they create if they have no personal liability for the firm's debts?

Corporation

Margie opened a used bookstore and is both the 100 percent owner and the store's manager. Which type of business entity does Margie own if she is personally liable for all the store's debts?

Sole proprietorship

The federal government has a tax claim on the cash flows of The Window Store. This claim is defined as a claim by one of the firm's:

Stakeholders

Lester's BBQ has $121,000 in current assets and $109,000 in current liabilities. These values as referred to as the firm's:

Working capital

Stadford, Inc. is financed with 40 percent debt and 60 percent equity. This mixture of debt and equity is referred to as the firm's:

Capital Structure

Tim has been promoted and is now in charge of all fixed asset purchases. In other words, Tim is in charge of:

Capital budgeting

Will and Bill 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. Will and Bill will equally share in the decision making and in the profits or losses. Which type of business did they create if they both have full personal liability for the firm's debts?

General partnership