chapter 1 FRL 300
Which one of the following best states the primary goal of financial management?
Maximize the current value per share
Which of the following accounts are included in working capital management
accounts payable, accounts receivable, and inventory
Which one of the following terms is defined as a conflict of interest between the corporate shareholders and the corporate managers?
agency problem
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 structure
The decision to issue additional shares of stock is an example of which one of the following?
capital structure decision
Which one of the following is a capital budgeting decision?
deciding whether or not to purchase a new machine for the production line
Which one of the following is a capital structure decision?
determining how much debt should be assumed to fund a project
Which one of the following is a working capital management decision?
determining whether to pay cash for a purchase or use the credit offered by the supplier
Which of the following are advantages of the corporate form of business ownership?
limited liability for firm debt, ability to raise capital, unlimited firm life
Which one of the following best describes the primary advantage of being a limited partner instead of a general partner?
maximum loss limited to the capital invested
T/F? Both sole proprietorship and partnership income is taxed as individual income
true
T/F? Corporations can raise large amounts of capital generally easier than partnerships can.
true
Which one of the following is defined as a firm's short-term assets and its short-term liabilities?
working capital
Are corporations best suited to raising large amounts of capital?
yes
Which of the following should a financial manager consider when analyzing a capital budgeting project?
I. II III. IV. / 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