Question 1

The primary goal of a financial manager is ________.

Accepted Answer

A)  minimizing risk 
B)  maximizing profit 
C)  maximizing wealth 
D)  minimizing return 
A)  minimizing risk 
B)  maximizing profit 
C)  maximizing wealth 
D)  minimizing return

Question 2

The ________ has/have the ultimate responsibility in guiding corporate affairs and carrying out policies.

Accepted Answer

A)  board of directors 
B)  chief financial officer 
C)  stockholders 
D)  creditors 
A)  board of directors 
B)  chief financial officer 
C)  stockholders 
D)  creditors

Question 3

Which of the following activities of a finance manager determines the types of assets the firm holds?

Accepted Answer

A)  budget allocation 
B)  investment decisions 
C)  financing decisions 
D)  analyzing and planning cash flows 
A)  budget allocation 
B)  investment decisions 
C)  financing decisions 
D)  analyzing and planning cash flows

Question 4

When considering a firm's financial decision alternative, financial managers should accept only those actions that are expected to increase the firm's profitability.

Accepted Answer

A) True 
 B)False

Question 5

If managers are not owners of their company, then they are ________.

Accepted Answer

A)  dealers 
B)  agents 
C)  bondholders 
D)  brokers 
A)  dealers 
B)  agents 
C)  bondholders 
D)  brokers

Question 6

Which of the following legal forms of organization has the ease of dissolution?

Accepted Answer

A)  sole proprietorships 
B)  partnerships 
C)  limited partnerships 
D)  corporations 
A)  sole proprietorships 
B)  partnerships 
C)  limited partnerships 
D)  corporations

Question 7

The wealth of corporate owners is measured by the share price of the stock.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is one of the key activities of a financial manager?

Accepted Answer

A)  making financing decisions 
B)  managing cost accounting 
C)  managing financial accounting 
D)  making legal policy decisions 
A)  making financing decisions 
B)  managing cost accounting 
C)  managing financial accounting 
D)  making legal policy decisions

Question 9

Which of the e following is true of cash basis accounting?

Accepted Answer

A)  All credit sales will be recorded as revenue. 
B)  Revenue is recognized when a customer pays cash. 
C)  Expenses are recognized when they are incurred. 
D)  Accounts receivable and accounts payable can never be zero. 
A)  All credit sales will be recorded as revenue. 
B)  Revenue is recognized when a customer pays cash. 
C)  Expenses are recognized when they are incurred. 
D)  Accounts receivable and accounts payable can never be zero.

Question 10

The accrual method recognizes revenue at the point of sale and recognizes expenses when incurred.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is a strength of a corporation?

Accepted Answer

A)  low taxes 
B)  limited liability 
C)  low organization costs 
D)  less government regulation 
A)  low taxes 
B)  limited liability 
C)  low organization costs 
D)  less government regulation

Question 12

A financial manager's primary activities include making investment and financing decisions.

Accepted Answer

A) True 
 B)False

Question 13

In a limited partnership, all partners' liabilities are limited to their investment in the partnership.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is true of stakeholders?

Accepted Answer

A)  They are the owners of a firm. 
B)  They are groups to whom a firm has financial obligations. 
C)  They are groups having a direct economic link to a firm. 
D)  They include only the bondholders, common stockholders, and preferred stockholders. 
A)  They are the owners of a firm. 
B)  They are groups to whom a firm has financial obligations. 
C)  They are groups having a direct economic link to a firm. 
D)  They include only the bondholders, common stockholders, and preferred stockholders.

Question 15

A higher earnings per share (EPS) does not necessarily translate into a higher stock price.

Accepted Answer

A) True 
 B)False

Question 16

The accountant of a firm evaluates financial statements, develops additional data, and makes decisions based on his or her assessment of the associated returns and risks.

Accepted Answer

A) True 
 B)False

Question 17

Dividend payments change directly with changes in earnings per share.

Accepted Answer

A) True 
 B)False

Question 18

Financial managers perform different tasks developing a financial plan or budget, extending credit to customers, evaluating proposed large expenditures, and raising money to fund a firm's operations.

Accepted Answer

A) True 
 B)False

Question 19

The primary economic principle used in managerial finance is ________.

Accepted Answer

A)  purchase power parity 
B)  asset pricing theory 
C)  Porter's theory of five forces 
D)  marginal cost-benefit analysis 
A)  purchase power parity 
B)  asset pricing theory 
C)  Porter's theory of five forces 
D)  marginal cost-benefit analysis

Question 20

Financial managers administer the financial affairs of all types of businesses such as private and public, large and small, and profit seeking and not for profit.

Accepted Answer

A) True 
 B)False

The primary goal of a financial manager is ________.

The ________ has/have the ultimate responsibility in guiding corporate affairs and carrying out policies.

Which of the following activities of a finance manager determines the types of assets the firm holds?

When considering a firm's financial decision alternative, financial managers should accept only those actions that are expected to increase the firm's profitability.

If managers are not owners of their company, then they are ________.

Which of the following legal forms of organization has the ease of dissolution?

The wealth of corporate owners is measured by the share price of the stock.

Which of the following is one of the key activities of a financial manager?

Which of the e following is true of cash basis accounting?

The accrual method recognizes revenue at the point of sale and recognizes expenses when incurred.

Which of the following is a strength of a corporation?

A financial manager's primary activities include making investment and financing decisions.

In a limited partnership, all partners' liabilities are limited to their investment in the partnership.

Which of the following is true of stakeholders?

A higher earnings per share (EPS) does not necessarily translate into a higher stock price.

The accountant of a firm evaluates financial statements, develops additional data, and makes decisions based on his or her assessment of the associated returns and risks.

Dividend payments change directly with changes in earnings per share.

Financial managers perform different tasks developing a financial plan or budget, extending credit to customers, evaluating proposed large expenditures, and raising money to fund a firm's operations.

The primary economic principle used in managerial finance is ________.

Financial managers administer the financial affairs of all types of businesses such as private and public, large and small, and profit seeking and not for profit.

The Financial Market Environment

Financial Statements and Ratio Analysis

Cash Flow and Financial Planning

Time Value of Money

Interest Rates and Bond Valuation

Stock Valuation

Risk and Return

The Cost of Capital

Capital Budgeting Techniques

Capital Budgeting Cash Flows

Risk and Refinements in Capital Budgeting

Leverage and Capital Structure

Payout Policy

Working Capital and Current Assets Management

Current Liabilities Management

Hybrid and Derivative Securities

Mergers, Lbos, Divestitures, and Business Failure

International Managerial Finance

Filters

Exam 1: The Role of Managerial Finance

The primary goal of a financial manager is ________.

The ________ has/have the ultimate responsibility in guiding corporate affairs and carrying out policies.

Which of the following activities of a finance manager determines the types of assets the firm holds?

When considering a firm's financial decision alternative, financial managers should accept only those actions that are expected to increase the firm's profitability.

If managers are not owners of their company, then they are ________.

Which of the following legal forms of organization has the ease of dissolution?

The wealth of corporate owners is measured by the share price of the stock.

Which of the following is one of the key activities of a financial manager?

Which of the e following is true of cash basis accounting?

The accrual method recognizes revenue at the point of sale and recognizes expenses when incurred.

Which of the following is a strength of a corporation?

A financial manager's primary activities include making investment and financing decisions.

In a limited partnership, all partners' liabilities are limited to their investment in the partnership.

Which of the following is true of stakeholders?

A higher earnings per share (EPS) does not necessarily translate into a higher stock price.

The accountant of a firm evaluates financial statements, develops additional data, and makes decisions based on his or her assessment of the associated returns and risks.

Dividend payments change directly with changes in earnings per share.

Financial managers perform different tasks developing a financial plan or budget, extending credit to customers, evaluating proposed large expenditures, and raising money to fund a firm's operations.

The primary economic principle used in managerial finance is ________.

Financial managers administer the financial affairs of all types of businesses such as private and public, large and small, and profit seeking and not for profit.

The Financial Market Environment

Financial Statements and Ratio Analysis

Cash Flow and Financial Planning

Time Value of Money

Interest Rates and Bond Valuation

Stock Valuation

Risk and Return

The Cost of Capital

Capital Budgeting Techniques

Capital Budgeting Cash Flows

Risk and Refinements in Capital Budgeting

Leverage and Capital Structure

Payout Policy

Working Capital and Current Assets Management

Current Liabilities Management

Hybrid and Derivative Securities

Mergers, Lbos, Divestitures, and Business Failure

International Managerial Finance

Filters