fin 381 – Flashcards
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Capital budgeting.
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Which one of the following terms is defined as the management of a firm's long-term investments?
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General partnership.
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A business formed by two or more individuals who each have unlimited liability for all of the firm's business debts is called a:
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Deciding whether or not to purchase a new machine for the production line.
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Which one of the following is a capital budgeting decision?
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Maximum loss limited to the capital invested.
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Which one of the following best describes the primary advantage of being a limited partner instead of a general partner?
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Market value per share of outstanding stock.
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Decisions made by financial managers should primarily focus on increasing which one of the following?
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Was facilitated in the secondary market.
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Shareholder A sold 500 shares of ABC stock on the New York Stock Exchange. This transaction:
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Capital structure.
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Which one of the following terms is defined as the mixture of a firm's debt and equity financing?
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Working capital.
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Which one of the following is defined as a firm's short-term assets and its short-term liabilities?
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Limited partner.
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A business partner whose potential financial loss in the partnership will not exceed his or her investment in that partnership is called a:
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Vice president of finance
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The controller of a corporation generally reports directly to the:
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I, II, and IV only.
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Which of the following accounts are included in working capital management?
I. Accounts Payable
II. Accounts Receivable
III. Fixed Assets
IV. Inventory
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It is easy to create a sole proprietorship.
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Which one of the following statements concerning a sole proprietorship is correct?
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Because they have been hired to represent the interests of the current shareholders.
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Why should financial managers strive to maximize the current value per share of the existing stock?
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Increasing current profits when doing so lowers the value of the firm's equity.
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Which one of the following actions by a financial manager is most apt to create an agency problem?
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Corporation.
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Which form of business structure is most associated with agency problems?
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Sale of a new share of stock to an individual investor.
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Which one of the following is a primary market transaction?
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Was facilitated in the secondary market.
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Shareholder A sold 500 shares of ABC stock on the New York Stock Exchange. This transaction:
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Some large companies are listed on NASDAQ.
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Which one of the following statements concerning stock exchanges is correct?
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The listing requirements for the NYSE are more stringent than those of NASDAQ.
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Which one of the following statements is correct concerning the NYSE?
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Shareholders.
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Financial managers should primarily focus on the interests of:
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increase shareholders wealth
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goal of finacial manegment is to
