Financial Mgmt Rutgers
Exam 1 questions and
answers 2025
3 questions to ask when starting a business -
answer 1. What long-term investments (buildings,
machinery, and equipment)?
2. How will you finance it, other owners or borrow?
3. How will you manage financial activities?
Two offices a CFO handles - answer Controller and
Treasurer
Controller - answer cost and financial accounting,
tax payments, and management info systems
Treasurer - answer Managing cash and credit,
financial planning, and capital expenditures
Capital Budgeting - answer the process of planning
and managing a firm's long-term investments
must evaluate size, timing, and risk of future cash
flows
,Capital structure - answer the specific mixture of
long-term debt and equity the firm uses to finance
its operations
Working capital - answer a firm's short-term assets
and liabilities
1) Cash and inventory on hand
2) Sell on credit? What terms?
3) How to get short-term financing
Sole Proprietorship - answer A business owned by
one person
Keep all profit but there is unlimited liability
life limited to the owner's life span
difficult to transfer
Partnership - answer two or more owners
General partnership - answer all the partners share
in the gains and losses, and all have unlimited
liability for all partnership debts
, Limited partnership - answer one or more general
partners and one or more limited partners
limited partners have limited liability. it is limited
to their contribution to the business
Corporation - answer A legal "person", separate
and distinct from its owners
articles of incorporation and a set of bylaws
unlimited life and easily transferred ownership.
limited liability
articles of incorporation - answer a written legal
document that defines ownership and operating
procedures and conditions for the business
bylaws - answer rules describing how the
corporation regulates its existence
double taxation - answer profits are taxed at
corporate level and personal level
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