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FUNDAMENTALS OF FINANCE EXAM 1 QUESTIONS AND ANSWERS -9
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FUNDAMENTALS OF FINANCE EXAM 1 QUESTIONS AND ANSWERS -9
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FUNDAMENTALS OF FINANCE EXAM 1 QUESTIONS ANDANSWERS #9
Four main areas of finance - correct answer corporate, financial institutions,
investments, and international finance
What questions does business finance answer? - correct answer what long term
investments should you take on? (capital budgeting)
Where will you get the long term financing to pay for investments? (capital structure)
How will you manage every day financial activities? (net working capital)
Responsibilities of the controller - correct answer cost and financial accounting, tax
payments, and mis
Responsibilities of the treasurer - correct answer cash manager, credit manager, capital
expenditures, and financial planning
Capital budgeting is concerned with - correct answer long term investments
Capital structure is concerned with - correct answer how a firm obtains its financing
Working capital is concerned with - correct answer a firms short term assets and
liabilities
Sole proprietorship
Liability?
How is it taxed?
Life span?
Amount of equity raised...?
Transfer of ownership - correct answer business owned by one person, simplest type of
business to start, least regulated form of organization
Owner has unlimited liability
All business income is taxed as personal income
Limited to the owner's life span
Limited to the proprietors personal wealth
Partnership
General partnership:
Liability - correct answer similar to proprietorship, two or more owners
All owners share in gains or losses
Unlimited liability
Limited partnership:
Liability? - correct answer one or more general partners run the business and have
unlimited liability, but there are one or more limited partners who do not actively
participate in the business (common in real estate ventures)
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