Exam 1: The Role and Objective of Financial Management

The activities of the treasurer include all of the following except:

Agency costs include all of the following except:

There are three forms of business organization. Which of the following has unlimited liability? I. Corporation II. General partnership

The advantages of the corporate form of organization over both sole proprietorships and partnerships include ____.

What are the shortcomings in the profit maximization objective as a managerial strategy?

Corporate officers normally include all the following except:

Financial decisions should be consistent with the goal of shareholder wealth maximization. However, there may be a divergence between shareholder wealth maximization and the actual goals of management. The primary reason for this is:

____ are important because the financial health of a firm depends on the firm being able to generate sufficient cash to pay its creditors, employees, suppliers, and owners.

The difference between a firm's annual after-tax operating profit and its total annual cost of capital is known as:

The net present value rule provides appropriate guidance for financial decision makers when costs are incurred immediately but

The chief financial officer (CFO) of a corporation normally reports to the ____ of the company.

____ are largely outside of the direct control of managers.

There are problems with using the "profit maximization" criterion. Which of the following is/are correct? I. Profit maximization has an ambiguous definition of "maximizing profits". II) Profit maximization fails to consider risk.

When KKR acquired RJR Nabisco, the ____ in the debt ratio, resulted in a(n) ____ in the value of the firm's outstanding bonds.

The chief financial officer (CFO) normally has responsibility for all the following except:

Explain the chain of command in a corporation.

Accounting-based measures of performance ____ subject to short-term manipulation by managers; cash flows ____ subject to short-term manipulation.

An advantage that the corporate form of business has over either the sole proprietorship or partnership is the:

The most widely accepted objective of the firm is to

The most important managerial objective is to: