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FIN 300 Exam 1 review
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FIN 300 Exam 1 review
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FIN 300 Exam 1 reviewWhich one of the following is a capital structure decision?
A) Determining how to allocate investment funds to multiple projects.
B) Determining which one of two projects to accept.
C) Determining how much inventory will be needed to support a project.
D) Determining how much debt should be assumed to fund a project.
E) Determining the amount of funds needed to finance customer purchases of a new product. - D
Which of the following are advantages of the corporate form of business ownership?
I. Limited liability for firm debt.
II. Double taxation.
III. Ability to raise capital. IV. Unlimited firm life. - I, III, IV
A general partner:
A) Is personally responsible for all the partnership debts. B) Receives a salary in lieu of a portion of the profits. C) Has a maximum loss equal to his or her equity investment.
D) Faces double taxation whereas a limited partner does not.
E) Has no say over a firm's daily operations. - A
Financial managers should primarily focus on the interests of: A) The board of directors. B) Shareholders.
C) Stakeholders.
D) The vice president of finance.
E) Their immediate supervisor. - B
Which one of the following parties has ultimate control of a corporation?
A) Board of directors. B) Shareholders.
C) Chairman of the board.
D) Chief executive officer.
E) Chief operating office. - B
Which type of business organization has all the respective rights and privileges of a legal person?
A) Corporation. B) General partnership.
C) Limited partnership.
D) Limited liability company.
E) Sole proprietorship. - A
A stakeholder is: A) A creditor to whom a firm currently owes money.
B) Any person who has voting rights based on stock ownership of a corporation.
C) A person who owns shares of stock.
D) Any person or entity other than a stockholder or creditor who potentially has a claim on the cash flows of a firm.
E) A person who initially founded a firm and currently has management control over that firm. - D
Corporate dividends are:
A) Tax-free since the corporation pays tax on that income when it is earned. B) Not taxed as shareholders pay taxes on corporate income when it is earned. C) Tax-free income because they represent a repayment of the cost to purchase corporate shares. D) Taxable as personal income when received by shareholders even though that income was taxed at the corporate level.
E) Taxed at both the corporate and the personal level when the dividends are paid. - D
Which of the following accounts are included in working capital management?
I. Accounts Payable
II. Accounts Receivable
III. Fixed Assets
IV. Inventory - I, II, IV
Which one of the following terms is defined as the mixture of a firm's debt and equity financing?
A) Cost analysis.
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