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Financial Management Theory and Practice 15th Edition Eugene Brigham - Test Bank
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,Ch 01 An Overview of Financial Management and the Financial Environment1. The form of organization for a business is not an important issue, as this decision has very little effect on the income
and wealth of the firm's owners.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT FMTP.EHRH.17.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and
: analysis of public information
LOCAL STANDARDSUnited States - OH - Default City - TBA
:
TOPICS: Firm organization
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 8/26/2015 10:43 AM
DATE MODIFIED: 8/26/2015 10:43 AM
QUESTION ID: JFND-GO4G-EO5U-ECKG
QUESTION G GCID-E7BW-1TBP-8YHU-NC3Z-GC5D-GCTT-8BUN-43JT-CFO1-43JT-GR4N-43UD-GY3N-4ATT-
LOBAL ID: GO3D-EA3O-CJDI-GWN8-EPRW-EMJW-CRHU-C3B3-CO4S-RCBA-CWSU-N3JI-CRSU-N3B3-
GOSU-NA5D-CCSU-OATA-GBTG-ECDF-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE
2. The major advantage of a regular partnership or a corporation as a form of business organization is the fact that both
offer their owners limited liability, whereas proprietorships do not.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT FMTP.EHRH.17.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and
: analysis of public information
LOCAL STANDARDSUnited States - OH - Default City - TBA
:
TOPICS: Firm organization
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 8/26/2015 10:43 AM
Cengage Learning Testing, Powered by Cognero Page 1
,Ch 01 An Overview of Financial Management and the Financial Environment
DATE MODIFIED: 8/26/2015 10:43 AM
QUESTION ID: JFND-GO4G-EO5U-ECKF
QUESTION G GCID-E7BW-1TBP-8YHU-NC3Z-GC5D-GCTT-8BUN-43JT-CFO1-43JT-GR4N-43UD-GY3N-4ATT-
LOBAL ID: GO3D-EA3O-CJDI-GWN8-EPRW-EMMG-GOHG-EPMF-GJOU-GA3T-GASS-EP3U-8RSS-RPTT-
GOSU-GATT-GRSS-RC3O-CR3U-KPMF-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE
3. There are three primary disadvantages of a regular partnership: (1) unlimited liability, (2) limited life of the
organization, and (3) difficulty of transferring ownership. These combine to make it difficult for partnerships to attract
large amounts of capital and thus to grow to a very large size.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT FMTP.EHRH.17.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and
: analysis of public information
LOCAL STANDARDSUnited States - OH - Default City - TBA
:
TOPICS: Partnership
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 8/26/2015 10:43 AM
DATE MODIFIED: 8/26/2015 10:43 AM
QUESTION ID: JFND-GO4G-EO5U-ECKR
QUESTION G GCID-E7BW-1TBP-8YHU-NC3Z-GC5D-GCTT-8BUN-43JT-CFO1-43JT-GR4N-43UD-GY3N-4ATT-
LOBAL ID: GO3D-EA3O-CJDI-GWN8-EPRW-EMJI-GFOS-K3TI-GYAG-EPUG-COSS-KPJS-CESU-CPT3-GOSS-
R3UR-CESU-YPMB-GC4S-GQJW-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE
4. Two disadvantages of a proprietorship are (1) the relative difficulty of raising new capital and (2) the owner's unlimited
personal liability for the business' debts.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT FMTP.EHRH.17.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
Cengage Learning Testing, Powered by Cognero Page 2
, Ch 01 An Overview of Financial Management and the Financial Environment
STATE STANDARDS United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and
: analysis of public information
LOCAL STANDARDSUnited States - OH - Default City - TBA
:
TOPICS: Proprietorship
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 8/26/2015 10:43 AM
DATE MODIFIED: 8/26/2015 10:43 AM
QUESTION ID: JFND-GO4G-EO5U-ECKD
QUESTION G GCID-E7BW-1TBP-8YHU-NC3Z-GC5D-GCTT-8BUN-43JT-CFO1-43JT-GR4N-43UD-GY3N-4ATT-
LOBAL ID: GO3D-EA3O-CJDI-GWN8-EPRW-EMJW-CCHU-CQJO-CA5U-EA31-COSS-CCJI-CESS-KAJ3-GOSU-
GP3O-GRSU-GPBT-GE5G-RPBU-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE
5. One key value of limited liability is that it lowers owners' risks and thereby enhances a firm's value.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT FMTP.EHRH.17.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and
: analysis of public information
LOCAL STANDARDSUnited States - OH - Default City - TBA
:
TOPICS: Limited liability
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 8/26/2015 10:43 AM
DATE MODIFIED: 8/26/2015 10:43 AM
QUESTION ID: JFND-GO4G-EO5U-ECJU
QUESTION G GCID-E7BW-1TBP-8YHU-NC3Z-GC5D-GCTT-8BUN-43JT-CFO1-43JT-GR4N-43UD-GY3N-4ATT-
LOBAL ID: GO3D-EA3O-CJDI-GWN8-EPRW-EMJI-C3OS-CPMR-GW5U-N3BA-GOSU-OAMR-CRSU-GATI-
GOSU-QCJW-GOSU-ECJW-GITD-ECJA-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE
6. The disadvantages associated with a proprietorship are similar to those under a partnership. One exception relates to the
more formal nature of the partnership agreement and the commitment of all partners' personal assets. As a result,
partnerships do not have difficulty raising large amounts of capital.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty: Moderate
Cengage Learning Testing, Powered by Cognero Page 3
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