Exam (elaborations)
FIN 310 Exam 1 Questions And Answers Latest Update
- Module
- FIN 310
- Institution
- American Intercontinental University (AIU)
FIN 310 Exam 1 Questions And Answers Latest Update
[Show more]
Content preview
Solution 2024/2025Pepper
FIN 310 Exam 1 Questions And Answers Latest
Update
Which of the following statements is false?
-Financial managers make three basic types of decisions: capital budgeting,
capital structure, and working capital management
-Capital budgeting is the process of planning and managing a firm's short
term investments
-The primary goal for corporate managers should be to make good decisions
to maximize the market value of the owner's equity
-Agency conflicts, which sometimes arise when CEOs are overly motivated
to seek job security, can be reduced by adjusting managerial compensation
ANS✔✔ B
Which of the following statements is true?
-In a sole proprietorship, the owner has limited liability and full control
-In a partnership, ownership can be transferred quickly, and capital can be
raised easily
-Corporations face double taxation, meaning the corporation pays taxes on
income before dividends, while the owners pay personal taxes on dividends
and capital gains
-Intended to improve public disclosures, the Sarbanes-Oxley Act has likely
increased the number of small companies going public in the USA ANS✔✔ C
, Solution 2024/2025
Pepper
Managers should act int he shareholders' interest because shareholders
have ___ priority in receiving their claims
-Top
-Somewhere in the middle
-Bottom
-Equal (to those of all other stakeholders) ANS✔✔ C
Which of the following is NOT an effective means of aligning management
goals with shareholder interests?
-Employee stock options
-Threat of a takeover
-Management bonuses tied to performance goals
-Compensating managers with salaries significantly higher than their peers
ANS✔✔ D
Which of the following statements is false?
-Liquidity measures the speed and ease with which assets can be converted
to cash without significant loss of value, and "fortress" balance sheets are
especially liquid
-Even though depreciation is not a cash expense, it affects taxes, and
corporations prefer to depreciate assets using accelerated over straight line
methods for tax purposes
-The marginal tax rate is the tax rate payable on the next dollar earned and
is always higher than the average tax rate
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Schoolflix. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £12.70. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
52928 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now