capital budgeting correct answers What long-term investments or projects should the business take on?
capital structure correct answers How should we pay for our assets?
Should we use debt or equity?
working capital management correct answers How do we manage the day-to-day finances of the f...
MGMT 310 Exam 1 || ALREADY PASSED!!
capital budgeting correct answers What long-term investments or projects should the business
take on?
capital structure correct answers How should we pay for our assets?
Should we use debt or equity?
working capital management correct answers How do we manage the day-to-day finances of
the firm? (short term investments, short-term assets, and short term liabilities)
liquidity costs correct answers reducing the selling price of the house to get it to sell
working capital correct answers any debt in less than a year is...
sole propietorship correct answers one shareholder and you can't sell yourself to anyone
advantages- easy to start, less regulated, you get all the profits, taxed once as personal income
disadvantages- bank can go over your personal wealth if you have any debts so UNLIMITED
LIABILITY, limited to life of owner, equity capital limited to owner's personal wealth,
difficult to sell ownership interest
Partnership correct answers a business owned by two or more people
advantages- more capital available, easy to start, income taxed once as personal income
disadvantages- unlimited liability, partnership dissolves if one general partner dies or wishes
to sell, difficult to transfer ownership
general partnership correct answers partnership in which partners share equally in both
responsibility and liability
exactly the same as sole proprietorship, just more people and partners share in gains and
losses
unlimited liability; all partners are general partners
limited partnership correct answers A partnership with one or more general partners
(unlimited liability) and one or more limited partners (limited liability)
general partners manage and limited partners won't participate in the business
corporation correct answers unlimited type/number of shareholders
advantages- LIMITED LIABILITY, business doesn't die, separation of ownership and mgmt,
transfer of ownership is easy, easier to raise capital (co. can go into market and issue new
shares)
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