Fin Ch 1-2 MC

In what year was SARBOX enacted by congress -2000 -2001 -2002 -2003 -2004

2002

What is the primary benefit of an S-corp -avoids double taxation -avoids state tax -avoids fed tax -avoids local tax -avoids all tax

Avoids double taxation

The FS that summarizes a firms accounting value as of a particular date is called -Income statement -BS -liquidity position -cash flow statement -periodic operating statement

BS

Which one of the following occupations best fits into the area of corporate finance -mortgage broker -treasury bill analyst -chief financial officer -insurance risk manager -local bank manager

Chief financial officer

Matt and alicia 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 firms debts -limited partnership -corporation -sole proprietorship -general partnership -public company

Corporation

the amount of tax paid on the next whole dollar of income, refers to which type of tax -double taxation -income tax -average tax -total tax -marginal tax

Marginal tax

A firm decided to make a decision that decreases their liquidity. What decision did the firm make -cash purchase of inventory -credit sale of inventory -cash sale of inventory -collection of an AR -proceeds from a long term load

cash purchase of inventory

over the past year a firms decreased it CA and increased it CL. As a result the firms NWC -decrease -increased -constant -both increased and decreased -unaffected

decreased

When reviewing a BS the assets are listed from top to bottom in order of -Decreasing liquidity -asset management -next due to be paid -last due to be paid -increasing liquidity

decreasing liquidity

Capital budgeting include the evaluation of which of the following -size of future cash flows only -size and timing of future cash flows only -timing and risk of future cash flows only -size, timing, and risk of future cash flows -risk and size of future cash flows only

size, timing, and risk of future cash flows

Production equipment is classified as -a NWC item -CL -CA -intangible fixed asset -tangible fixed asset

tangible fixed asset

An agency issue is most apt to develop when -a firm encounters period of stagnant growth -the control of a firm is separated from the firms ownership -a firms downsize -the forms owner is also its key manager -a firm is structured as a general partnership

the control of a firm is separated from the firms ownership

EPS measure the net income with respect to -dividends paid to each shareholder -the profit or loss for each share of stock -total profits or losses -min earnings -gross profit

the profit or loss for each share of stock

Jenna has been promoted and is now in charge of all external financing. In other word, she is in charge if -working capital management -asset allocation -risk management -capital budgeting -working capital management

working capital management