FIN 362 Week 1 Quiz | Assignment Help | Mercer University
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- 12 Sep 2020
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FIN 362 Week 1 Quiz | Assignment Help | Mercer University
FIN 362 ASSIGNMENT 1
Question 1
Which one of the following terms is defined as the
management of a firm's long-term investments?
o
Capital budgeting.
o
Agency cost analysis.
o
Working capital management.
o
Financial allocation.
o
Capital structure.
Question 2
Which one of the following terms is defined as the
mixture of a firm's debt and equity financing?
o
Capital structure.
o
Cost analysis.
o
Capital budgeting.
o
Cash management.
o
Working capital management.
Question 3
Which one of the following is defined as a firm's
short-term assets and its short-term liabilities?
o
Debt.
o
Investment capital.
o
Working capital.
o
Capital structure.
o
Net capital.
Question 4
A business owned by a solitary individual who has
unlimited liability for its debt is called a:
o
Limited liability company.
o
General partnership.
o
Sole proprietorship.
o
Limited partnership.
o
Corporation.
Question 5
A business formed by two or more individuals who
each have unlimited liability for all of the firm's business debts is called a:
o
Sole proprietorship.
o
Corporation.
o
Limited liability company.
o
Limited partnership.
o
General partnership.
Question 6
A business partner whose potential financial loss in
the partnership will not exceed his or her investment in that partnership is
called a:
o
Limited partner.
o
Zero partner.
o
Sole proprietor.
o
Corporate shareholder.
o
General partner.
Question 7
A business created as a distinct legal entity and
treated as a legal "person" is called a:
o
Limited partnership.
o
Sole proprietorship.
o
Unlimited liability company.
o
Corporation.
o
General partnership.
Question 8
Which one of the following terms is defined as a
conflict of interest between the corporate shareholders and the corporate
managers?
o
Corporate breakdown.
o
Articles of incorporation.
o
Agency problem.
o
Legal liability.
o
Bylaws.
Question 9
A stakeholder is:
o
A person who owns shares of stock.
o
Any person who has voting rights based
on stock ownership of a corporation.
o
Any person or entity other than a
stockholder or creditor who potentially has a claim on the cash flows of a
firm.
o
A creditor to whom a firm currently owes
money.
o
A person who initially founded a firm
and currently has management control over that firm.
Question 10
Which of the following questions are addressed by
financial managers?
I. How should a product be marketed?
II. Should customers be given 30 or 45 days to pay
for their credit purchases?
III. Should the firm borrow more money?
IV. Should the firm acquire new equipment?
o
II, III, and IV only.
o
II and III only.
o
I, II, and III only.
o
I, II, III, and IV.
o
I and IV only.
Question 11
Which one of the following functions should be the
responsibility of the controller rather than the treasurer?
o
Income tax returns.
o
Payment to a vendor.
o
Daily cash deposit.
o
Equipment purchase analysis.
o
Customer credit approval.
Question 12
The controller of a corporation generally reports
directly to the:
o
Board of directors.
o
Chairman of the board.
o
Vice president of finance.
o
President.
o
Chief executive officer.
Question 13
Which one of the following correctly defines the
upward chain of command in a typical corporate organizational structure?
o
The chief executive officer reports to
the president.
o
The controller reports to the president.
o
The vice president of finance reports to
the chairman of the board.
o
The treasurer reports to the vice
president of finance.
o
The chief operations officer reports to
the vice president of production.
Question 14
Which one of the following is a capital budgeting
decision?
o
Determining how much money should be
kept in the checking account.
o
Determining how many shares of stock to
issue.
o
Deciding whether or not to purchase a
new machine for the production line.
o
Deciding how to refinance a debt issue
that is maturing.
o
Determining how much inventory to keep
on hand.
Question 15
Which of the following should a financial manager
consider when analyzing a capital budgeting project?
I. Project start-up costs.
II. Timing of all projected cash flows.
III. Dependability of future cash flows.
IV. Dollar amount of each projected cash flow.
o
I, II, and IV only.
o
I, II, and III only.
o
I and IV only.
o
II, III, and IV only.
o
I, II, III, and IV.
Question 16
Which one of the following is a capital structure
decision?
o
Determining how to allocate investment
funds to multiple projects.
o
Determining how much inventory will be
needed to support a project.Correct!
o
Determining how much debt should be
assumed to fund a project.
o
Determining the amount of funds needed
to finance customer purchases of a new product.
o
Determining which one of two projects to
accept.
Question 17
The decision to issue additional shares of stock is
an example of which one of the following?
o
Capital budgeting.
o
Capital structure decision.
o
Net working capital decision.
o
Working capital management.
o
Controller's duties.
Question 18
Which of the following accounts are included in
working capital management?
I. Accounts Payable
II. Accounts Receivable
III. Fixed Assets
IV. Inventory
o
I, II, and IV only.
o
I and II only.
o
I and III only.
o
II and IV only.
o
II, III, and IV only.
Question 19
Which one of the following is a working capital
management decision?
o
Determining whether to pay cash for a
purchase or use the credit offered by the supplier.
o
Determining the number of shares of
stock to issue to fund an acquisition.
o
Determining the amount of long-term debt
required to complete a project.
o
Determining whether or not a project
should be accepted.
o
Determining the amount of equipment needed
to complete a job.
Question 20
Which one of the following statements concerning a
sole proprietorship is correct?
o
The owner of a sole proprietorship is
personally responsible for all of the company's debts.
o
There are very few sole proprietorships
remaining in the U.S. today.
o
A sole proprietorship is designed to
protect the personal assets of the owner.
o
A sole proprietorship is structured the
same as a limited liability company.
o
The profits of a sole proprietorship are
subject to double taxation.
Question 21
Which one of the following statements concerning a
sole proprietorship is correct?
o
The life of a sole proprietorship is
potentially unlimited.
o
It is easy to create a sole
proprietorship.
o
A sole proprietorship is taxed the same
as a C corporation.
o
Transferring ownership of a sole
proprietorship is easier than transferring ownership of a corporation.
o
A sole proprietor can generally raise
large sums of capital quite easily.
Question 22
Which of the following individuals have unlimited
liability based on their ownership interest?
I. General partner
II. Sole proprietor
III. Stockholder
IV. Limited partner
o
I, II, and III only.
o
II and IV only.
o
I, II, and IV only.
o
I and II only.
o
II only.
Question 23
Which one of the following business types is best
suited to raising large amounts of capital?
o
Limited partnership.
o
Sole proprietorship.
o
Limited liability company.
o
General partnership.
o
Corporation.
Question 24
Which type of business organization has all the
respective rights and privileges of a legal person?
o
Limited liability company.
o
Corporation.
o
Limited partnership.
o
Sole proprietorship.
o
General partnership.
Question 25
Which one of the following best states the primary
goal of financial management?
o
Maximize the current value per share.
o
Minimize operational costs while
maximizing firm efficiency.
o
Maintain steady growth while increasing
current profits.
o
Maximize current dividends per share.
o
Increase cash flow and avoid financial
distress.
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