BFIN 322-800 Business Finance Chapter One Homework

The daily financial operations of a firm are primarily controlled by managing the:

Working capital

An auction market:

has a physical trading floor

A limited liability company (LLC):

prefers its profits be taxed as personal income to its owners.

A corporation:

Is a legal entity separate from its owners

The issuer of a security must be involved in all _____ transactions involving that security.

primary market

The Sarbanes-Oxley Act in 2002 was primarily prompted by which of the following from the 1990s?

Corporate accounting and financial fraud

The goal of financial management is to increase the:

Current market value per share

Which of the following is not a basic area of finance as described by the text?

Accounting

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

Agency

Nishaa has been promoted and is now in charge of all external financing. In other words, she is in charge of:

Capital structure management

Working capital management includes which on of the following?

Determining which customers will be granted credit

Growth can summarize various aspects of a firm's _____ and _____ policies

Financial, investment

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 or losses. Which type of business did they create if they both have full personal liability for the firm's debts?

General partnership

Maria is the sole proprietor of an antique store that is located in a rented warehouse. The store has an outstanding loan with the local bank but no other debt obligations. There are no specific assets pledged as security for the loan. Due to a sudden and unexpected downturn in the economy, the store is unable to generate sufficient funds to pay the loan payments due to the bank. Which of the following options does the bank have to collect the money it is owed? I. Sell the inventory and apply the proceeds to the debt II. Sell the lighting fixtures from the building and apply the proceeds to the debt III. Withdraw funds from Maria's personal account at the bank to pay the store's debt IV. Sell any assets Maria personally owns and apply the proceeds to the store's debt

I, III, and IV only

Capital budgeting includes the evaluation of which of the following?

Size, timing, and risk of future cash flows

Levi had an unexpected surprise when he returned home this morning. He found that a chemical spill from a local manufacturer had spilled over onto his property. The potential claim that he has against this manufacturer is that of a(n):

Stakeholder

An agency issue is most apt to develop when:

The control of a firm is separated from the firm's ownership

When evaluating financial planning steps, we must consider all of the following, except:

The project horizon for the next 30 to 90 days.

To generate a coherent plan, goals and objectives will have to be modified, and priorities will have to be established

True

Silvia is employed as a currency trader in the Japanese yen market. Her job falls into which one of the following areas of finance?

International finance