Question 1

The goal to maximise the value of the company's shares focuses on maximising the value of:

Accepted Answer

A)  profits. 
B)  productive assets. 
C)  revenues. 
D)  cash flows. 
A)  profits. 
B)  productive assets. 
C)  revenues. 
D)  cash flows.

Question 2

An advantage of forming as a sole trader is because:

Accepted Answer

A)  it is the most complex type of business structure. 
B)  it is the most regulated form. 
C)  all profits from the business are kept by the owner. 
D)  the owner is exposed to limited liability. 
A)  it is the most complex type of business structure. 
B)  it is the most regulated form. 
C)  all profits from the business are kept by the owner. 
D)  the owner is exposed to limited liability.

Question 3

The goal for unlisted companies and partnerships can be stated as:

Accepted Answer

A)  maximise the current value of working capital. 
B)  maximise the current value of non-current assets. 
C)  minimise the current value of equity. 
D)  maximise the current value of non-current liabilities. 
A)  maximise the current value of working capital. 
B)  maximise the current value of non-current assets. 
C)  minimise the current value of equity. 
D)  maximise the current value of non-current liabilities.

Question 4

All companies are registered with and regulated by the:

Accepted Answer

A)  Corporations Act 2001. 
B)  ASX. 
C)  government. 
D)  ASIC. 
A)  Corporations Act 2001. 
B)  ASX. 
C)  government. 
D)  ASIC.

Question 5

The financial manager's goal is to:

Accepted Answer

A)  grow the company. 
B)  minimise risk. 
C)  maximise the value of the company's shares. 
D)  maximise profit. 
A)  grow the company. 
B)  minimise risk. 
C)  maximise the value of the company's shares. 
D)  maximise profit.

Question 6

A ____________ is a business entity owned by one person, and typically consists of the trader and a small number of employees.

Accepted Answer

A)  sole trader. 
B)  partnership. 
C)  public company. 
D)  private company. 
A)  sole trader. 
B)  partnership. 
C)  public company. 
D)  private company.

Question 7

The business environment that affects share prices excludes:

Accepted Answer

A)  corporate laws. 
B)  environmental regulations. 
C)  capital budgeting decisions. 
D)  procedural and safety regulations. 
A)  corporate laws. 
B)  environmental regulations. 
C)  capital budgeting decisions. 
D)  procedural and safety regulations.

Question 8

Which of the following statement(s) is (are) correct?

Accepted Answer

A)  Any residual cash flow is reinvested in the firm or paid as dividends. 
B)  Managers and other employees receive salaries and wages. 
C)  Cash is king. 
D)  All of the above. 
A)  Any residual cash flow is reinvested in the firm or paid as dividends. 
B)  Managers and other employees receive salaries and wages. 
C)  Cash is king. 
D)  All of the above.

Question 9

The decision-making process through which managers choose to finance productive assets is known as:

Accepted Answer

A)  financing decision. 
B)  investing decision. 
C)  capital budgeting. 
D)  operating decision. 
A)  financing decision. 
B)  investing decision. 
C)  capital budgeting. 
D)  operating decision.

Question 10

A working capital manager's role is to manage:

Accepted Answer

A)  inventory and accounts receivable only. 
B)  cash and inventory only. 
C)  cash, inventory, accounts receivable, accounts payable and risk management. 
D)  accounts receivable and payable only. 
A)  inventory and accounts receivable only. 
B)  cash and inventory only. 
C)  cash, inventory, accounts receivable, accounts payable and risk management. 
D)  accounts receivable and payable only.

Question 11

Which of the following conducts investigations of significant fraud in the company when senior managers are involved?

Accepted Answer

A)  Controller. 
B)  Internal auditor. 
C)  Treasurer. 
D)  Audit committee. 
A)  Controller. 
B)  Internal auditor. 
C)  Treasurer. 
D)  Audit committee.

Question 12

Increased regulation and oversight of the finance sector:

Accepted Answer

A)  encourage consumers to obtain independent advice. 
B)  protect consumers. 
C)  build consumer confidence in the system. 
D)  B and C 
A)  encourage consumers to obtain independent advice. 
B)  protect consumers. 
C)  build consumer confidence in the system. 
D)  B and C

Question 13

The main financial goal of the firm is to:

Accepted Answer

A)  increase revenue growth. 
B)  maximise profits. 
C)  maximise wealth. 
D)  increase market share. 
A)  increase revenue growth. 
B)  maximise profits. 
C)  maximise wealth. 
D)  increase market share.

Question 14

Most ethical problems that arise in business dealings are related to:

Accepted Answer

A)  agency obligations. 
B)  conflicts of interest. 
C)  information asymmetry. 
D)  all of the above. 
A)  agency obligations. 
B)  conflicts of interest. 
C)  information asymmetry. 
D)  all of the above.

Question 15

Economic shocks that affect share prices include:

Accepted Answer

A)  environmental regulations. 
B)  natural disasters. 
C)  corporate laws. 
D)  taxation. 
A)  environmental regulations. 
B)  natural disasters. 
C)  corporate laws. 
D)  taxation.

Question 16

Business owners usually choose the structure of their business based on:

Accepted Answer

A)  the taxation of profits. 
B)  the start-up size of its operations. 
C)  the legal liability of owners. 
D)  all of the above. 
A)  the taxation of profits. 
B)  the start-up size of its operations. 
C)  the legal liability of owners. 
D)  all of the above.

Question 17

Which of the following monitors and manages the company's risk exposure in financial and commodity markets?

Accepted Answer

A)  Controller. 
B)  Risk manager. 
C)  Treasurer. 
D)  Internal auditor. 
A)  Controller. 
B)  Risk manager. 
C)  Treasurer. 
D)  Internal auditor.

Question 18

Profit maximisation ignores:

Accepted Answer

A)  the risk associated with cash flows. 
B)  the time value of money. 
C)  the amount of cash flows. 
D)  A and B 
A)  the risk associated with cash flows. 
B)  the time value of money. 
C)  the amount of cash flows. 
D)  A and B

Question 19

Which of the following would have the biggest impact on the share price?

Accepted Answer

A)  Revelations of honesty. 
B)  A product recall. 
C)  An environmental offence. 
D)  Revelations of deception and fraud. 
A)  Revelations of honesty. 
B)  A product recall. 
C)  An environmental offence. 
D)  Revelations of deception and fraud.

Question 20

Which of the following is responsible for performing audits to determine where the company might incur substantial losses?

Accepted Answer

A)  Controller. 
B)  Risk manager. 
C)  Internal auditor. 
D)  Treasurer. 
A)  Controller. 
B)  Risk manager. 
C)  Internal auditor. 
D)  Treasurer.

The goal to maximise the value of the company's shares focuses on maximising the value of:

An advantage of forming as a sole trader is because:

The goal for unlisted companies and partnerships can be stated as:

All companies are registered with and regulated by the:

The financial manager's goal is to:

A ____________ is a business entity owned by one person, and typically consists of the trader and a small number of employees.

The business environment that affects share prices excludes:

Which of the following statement(s) is (are) correct?

The decision-making process through which managers choose to finance productive assets is known as:

A working capital manager's role is to manage:

Which of the following conducts investigations of significant fraud in the company when senior managers are involved?

Increased regulation and oversight of the finance sector:

The main financial goal of the firm is to:

Most ethical problems that arise in business dealings are related to:

Economic shocks that affect share prices include:

Business owners usually choose the structure of their business based on:

Which of the following monitors and manages the company's risk exposure in financial and commodity markets?

Profit maximisation ignores:

Which of the following would have the biggest impact on the share price?

Which of the following is responsible for performing audits to determine where the company might incur substantial losses?

Time Value of Money, Financial Markets, the Reserve Bank of Australia and Interest Rates

Discounted Cash Flows and Valuation

Risk and Return

Share Valuation and Bond Valuation

Capital Budgeting and Cash Flows

Cost of Capital and Working Capital Management

Capital Structure and Dividend Policy

Filters

Exam 1: Finance in Business

The goal to maximise the value of the company's shares focuses on maximising the value of:

An advantage of forming as a sole trader is because:

The goal for unlisted companies and partnerships can be stated as:

All companies are registered with and regulated by the:

The financial manager's goal is to:

A ____________ is a business entity owned by one person, and typically consists of the trader and a small number of employees.

The business environment that affects share prices excludes:

Which of the following statement(s) is (are) correct?

The decision-making process through which managers choose to finance productive assets is known as:

A working capital manager's role is to manage:

Which of the following conducts investigations of significant fraud in the company when senior managers are involved?

Increased regulation and oversight of the finance sector:

The main financial goal of the firm is to:

Most ethical problems that arise in business dealings are related to:

Economic shocks that affect share prices include:

Business owners usually choose the structure of their business based on:

Which of the following monitors and manages the company's risk exposure in financial and commodity markets?

Profit maximisation ignores:

Which of the following would have the biggest impact on the share price?

Which of the following is responsible for performing audits to determine where the company might incur substantial losses?

Time Value of Money, Financial Markets, the Reserve Bank of Australia and Interest Rates

Discounted Cash Flows and Valuation

Risk and Return

Share Valuation and Bond Valuation

Capital Budgeting and Cash Flows

Cost of Capital and Working Capital Management

Capital Structure and Dividend Policy

Filters