Question 1

Since the implementation of Sarbanes-Oxley,the cost of corporate audits in the United States

Accepted Answer

A) has steadily increased. 
B) has steadily decreased. 
C) has remained about the same. 
D) increased substantially,but over time has been decreasing. 
E) decreased substantially,but over time has been increasing. 
A) has steadily increased. 
B) has steadily decreased. 
C) has remained about the same. 
D) increased substantially,but over time has been decreasing. 
E) decreased substantially,but over time has been increasing.

Question 2

The primary goal of financial management is to

Accepted Answer

A) maximize current dividends per share of the existing stock. 
B) minimize operational costs and maximize firm efficiency. 
C) maintain steady growth in both sales and net earnings. 
D) maximize the current value per share of the existing stock. 
E) avoid financial distress. 
A) maximize current dividends per share of the existing stock. 
B) minimize operational costs and maximize firm efficiency. 
C) maintain steady growth in both sales and net earnings. 
D) maximize the current value per share of the existing stock. 
E) avoid financial distress.

Question 3

Which form of business structure faces the greatest agency problems?

Accepted Answer

A) Sole proprietorship 
B) General partnership 
C) Limited partnership 
D) Limited liability company 
E) Corporation 
A) Sole proprietorship 
B) General partnership 
C) Limited partnership 
D) Limited liability company 
E) Corporation

Question 4

The owners of a limited liability company prefer

Accepted Answer

A) being taxed like a corporation. 
B) having liability exposure similar to that of a sole proprietor. 
C) being taxed personally on all business income. 
D) having liability exposure similar to that of a general partner. 
E) being taxed like a corporation with liability like a partnership. 
A) being taxed like a corporation. 
B) having liability exposure similar to that of a sole proprietor. 
C) being taxed personally on all business income. 
D) having liability exposure similar to that of a general partner. 
E) being taxed like a corporation with liability like a partnership.

Question 5

Which position is generally directly responsible for financial planning and capital expenditures?

Accepted Answer

A) Controller 
B) Treasurer 
C) Director 
D) Chairman of the board 
E) Chief operations officer 
A) Controller 
B) Treasurer 
C) Director 
D) Chairman of the board 
E) Chief operations officer

Question 6

Which type of business is the easiest and cheapest to form?

Accepted Answer

A) Limited partnership 
B) Limited liability company 
C) General partnership 
D) Corporation 
E) Sole proprietorship 
A) Limited partnership 
B) Limited liability company 
C) General partnership 
D) Corporation 
E) Sole proprietorship

Question 7

Which one of the following statements is correct concerning the organizational structure of a corporation?

Accepted Answer

A) The vice president of finance reports to the chairman of the board. 
B) The chief operations officer reports to the chief executive officer. 
C) The controller reports to the president. 
D) The treasurer reports to the chief executive officer. 
E) The chief operations officer reports to the vice president of production. 
A) The vice president of finance reports to the chairman of the board. 
B) The chief operations officer reports to the chief executive officer. 
C) The controller reports to the president. 
D) The treasurer reports to the chief executive officer. 
E) The chief operations officer reports to the vice president of production.

Question 8

Which one of these is an intangible asset?

Accepted Answer

A) Building 
B) Machinery 
C) Vehicle 
D) Loan 
E) Trademark 
A) Building 
B) Machinery 
C) Vehicle 
D) Loan 
E) Trademark

Question 9

Agency costs refer to

Accepted Answer

A) corporate income subject to double taxation. 
B) the total dividends paid to stockholders over the lifetime of a firm. 
C) the costs of any conflicts of interest between stockholders and management. 
D) the costs that result from default and bankruptcy of a firm. 
E) the total interest paid to creditors over the lifetime of the firm. 
A) corporate income subject to double taxation. 
B) the total dividends paid to stockholders over the lifetime of a firm. 
C) the costs of any conflicts of interest between stockholders and management. 
D) the costs that result from default and bankruptcy of a firm. 
E) the total interest paid to creditors over the lifetime of the firm.

Question 10

The process of planning and managing a firm's long-term investments is referred to as

Accepted Answer

A) capital budgeting. 
B) agency cost analysis. 
C) financial depreciation. 
D) working capital management. 
E) capital structure. 
A) capital budgeting. 
B) agency cost analysis. 
C) financial depreciation. 
D) working capital management. 
E) capital structure.

Question 11

Which one of the following business types is best suited to raising large amounts of capital?

Accepted Answer

A) Sole proprietorship 
B) Limited liability company 
C) Limited partnership 
D) General partnership 
E) Corporation 
A) Sole proprietorship 
B) Limited liability company 
C) Limited partnership 
D) General partnership 
E) Corporation

Question 12

The key difference between the responsibilities of the controller and those of the treasurer is best defined as the separation of duties between

Accepted Answer

A) managing assets versus managing debt and equity. 
B) processing tax records versus accounting records. 
C) national versus international operations. 
D) production versus marketing. 
E) cash control versus accounting records. 
A) managing assets versus managing debt and equity. 
B) processing tax records versus accounting records. 
C) national versus international operations. 
D) production versus marketing. 
E) cash control versus accounting records.

Question 13

Which one of the following best describes the primary advantage of being a limited partner rather than a general partner?

Accepted Answer

A) No potential financial loss 
B) Entitlement to a larger portion of the partnership's income 
C) Liability for firm debts limited to the capital invested 
D) Greater management responsibility 
E) Ability to manage the day-to-day affairs of the business 
A) No potential financial loss 
B) Entitlement to a larger portion of the partnership's income 
C) Liability for firm debts limited to the capital invested 
D) Greater management responsibility 
E) Ability to manage the day-to-day affairs of the business

Question 14

Which one of these is a corporate document that sets forth the intended life of the firm?

Accepted Answer

A) Federal charter 
B) Articles of incorporation 
C) Corporate bylaws 
D) Indenture contract 
E) State charter 
A) Federal charter 
B) Articles of incorporation 
C) Corporate bylaws 
D) Indenture contract 
E) State charter

Question 15

Art purchased 2,500 shares of Delta stock.His purchase represents 10 percent ownership in the firm.His shares have increased in value from the $12 a share he originally paid to today's market value of $13 a share.Assume Delta goes bankrupt and owes $450,000 more in debts than the firm can pay after liquidating all of its assets.What is the maximum loss per share Art will incur on this investment?

Accepted Answer

A) $0 a share 
B) $12 a share 
C) $12.50 a share,computed as ($12 + $13)/ 2 
D) $13 a share 
E) $18 share,computed as (10% × $450,000)/ 2,500 shares 
A) $0 a share 
B) $12 a share 
C) $12.50 a share,computed as ($12 + $13)/ 2 
D) $13 a share 
E) $18 share,computed as (10% × $450,000)/ 2,500 shares

Question 16

A general partner

Accepted Answer

A) cannot lose more than the amount of his/her equity investment. 
B) has less legal liability than a limited partner. 
C) faces double taxation whereas a limited partner does not. 
D) has more management responsibility than a limited partner. 
E) is the term applied only to corporations that invest in partnerships. 
A) cannot lose more than the amount of his/her equity investment. 
B) has less legal liability than a limited partner. 
C) faces double taxation whereas a limited partner does not. 
D) has more management responsibility than a limited partner. 
E) is the term applied only to corporations that invest in partnerships.

Question 17

The articles of incorporation

Accepted Answer

A) establish the rights of the shareholders. 
B) are rules that apply only to limited liability companies. 
C) address only those issues related to a corporation's managers and directors. 
D) establish the compensation to be granted to senior managers. 
E) include only the name,purpose,and intended life of the corporation. 
A) establish the rights of the shareholders. 
B) are rules that apply only to limited liability companies. 
C) address only those issues related to a corporation's managers and directors. 
D) establish the compensation to be granted to senior managers. 
E) include only the name,purpose,and intended life of the corporation.

Question 18

A business entity operated and taxed like a partnership,but with limited liability for the owners,is called a

Accepted Answer

A) limited liability company. 
B) general partnership. 
C) limited proprietorship. 
D) sole proprietorship. 
E) corporation. 
A) limited liability company. 
B) general partnership. 
C) limited proprietorship. 
D) sole proprietorship. 
E) corporation.

Question 19

A proxy fight occurs whenever

Accepted Answer

A) any board member is up for re-election. 
B) a firm files for bankruptcy. 
C) a shareholder sells shares in the open market. 
D) a group solicits votes to replace the current board of directors. 
E) a firm is declared insolvent. 
A) any board member is up for re-election. 
B) a firm files for bankruptcy. 
C) a shareholder sells shares in the open market. 
D) a group solicits votes to replace the current board of directors. 
E) a firm is declared insolvent.

Question 20

In a limited partnership,

Accepted Answer

A) each limited partner's liability is limited to his net worth. 
B) each limited partner's liability is limited to his annual salary. 
C) each limited partner's liability is limited to the amount he/she invested. 
D) there is no limitation on liability;only a limitation on what the partner can earn. 
E) limitations are placed on both the salary and personal liability of each limited partner. 
A) each limited partner's liability is limited to his net worth. 
B) each limited partner's liability is limited to his annual salary. 
C) each limited partner's liability is limited to the amount he/she invested. 
D) there is no limitation on liability;only a limitation on what the partner can earn. 
E) limitations are placed on both the salary and personal liability of each limited partner.

Since the implementation of Sarbanes-Oxley,the cost of corporate audits in the United States

The primary goal of financial management is to

Which form of business structure faces the greatest agency problems?

The owners of a limited liability company prefer

Which position is generally directly responsible for financial planning and capital expenditures?

Which type of business is the easiest and cheapest to form?

Which one of the following statements is correct concerning the organizational structure of a corporation?

Which one of these is an intangible asset?

Agency costs refer to

The process of planning and managing a firm's long-term investments is referred to as

Which one of the following business types is best suited to raising large amounts of capital?

The key difference between the responsibilities of the controller and those of the treasurer is best defined as the separation of duties between

Which one of the following best describes the primary advantage of being a limited partner rather than a general partner?

Which one of these is a corporate document that sets forth the intended life of the firm?

A general partner

The articles of incorporation

A business entity operated and taxed like a partnership,but with limited liability for the owners,is called a

A proxy fight occurs whenever

In a limited partnership,

Financial Statements AMCQ Cash Flow

Financial Statements Analysis Amcq Financial Models

Discounted Cash Flow Valuation

Interest Rates AMCQ Bomcq Valuation

Stock Valuation

Net Present Value AMCQ Other Investment Rules

Making Capital Investment Decisions

Risk Analysis, Real Options, AMCQ Capital Budgeting

Risk Amcq Return: Lessons From Market History

Return Amcq Risk: the Capital Asset Pricing Model Capm

Risk, cost of Capital, AMCQ Valuation

Efficient Capital Markets Amcq Behavioral Challenges

Capital Structure: Basic Concepts

Capital Structure: Limits to the Use of Debt

Dividemcqs AMCQ Other Payouts

Options Amcq Corporate Finance

Short-Term Finance Amcq Planning

Raising Capital

International Corporate Finance

Mergers Amcq Acquisitions Web Only

Filters

Exam 1: Introduction to Corporate Finance

Since the implementation of Sarbanes-Oxley,the cost of corporate audits in the United States

The primary goal of financial management is to

Which form of business structure faces the greatest agency problems?

The owners of a limited liability company prefer

Which position is generally directly responsible for financial planning and capital expenditures?

Which type of business is the easiest and cheapest to form?

Which one of the following statements is correct concerning the organizational structure of a corporation?

Which one of these is an intangible asset?

Agency costs refer to

The process of planning and managing a firm's long-term investments is referred to as

Which one of the following business types is best suited to raising large amounts of capital?

The key difference between the responsibilities of the controller and those of the treasurer is best defined as the separation of duties between

Which one of the following best describes the primary advantage of being a limited partner rather than a general partner?

Which one of these is a corporate document that sets forth the intended life of the firm?

A general partner

The articles of incorporation

A business entity operated and taxed like a partnership,but with limited liability for the owners,is called a

A proxy fight occurs whenever

In a limited partnership,

Financial Statements AMCQ Cash Flow

Financial Statements Analysis Amcq Financial Models

Discounted Cash Flow Valuation

Interest Rates AMCQ Bomcq Valuation

Stock Valuation

Net Present Value AMCQ Other Investment Rules

Making Capital Investment Decisions

Risk Analysis, Real Options, AMCQ Capital Budgeting

Risk Amcq Return: Lessons From Market History

Return Amcq Risk: the Capital Asset Pricing Model Capm

Risk, cost of Capital, AMCQ Valuation

Efficient Capital Markets Amcq Behavioral Challenges

Capital Structure: Basic Concepts

Capital Structure: Limits to the Use of Debt

Dividemcqs AMCQ Other Payouts

Options Amcq Corporate Finance

Short-Term Finance Amcq Planning

Raising Capital

International Corporate Finance

Mergers Amcq Acquisitions Web Only

Filters