Exam 1: An Overview of Managerial Finance

The finance function is relatively independent of most other corporate functions.Marketing decisions, for example, might affect the firm's need for funds but are not affected by conditions in financial markets or other financing issues.

Which of the following statements is correct?

In the United States, the most common form of business is the of the sales and profits is the ____.

Everything else equal, including firm size, dollar sales, type of product sold, and so forth, the primary difference between the proprietorship and partnership business forms is that

Nations do not have the sovereignty to expropriate the assets of a firm without compensation.

Which of the following is a reason why companies move into international operations?

In a competitive marketplace, if managers deviate too far from making decisions that are consistent with stockholder wealth maximization, they risk being disciplined by the market.Part of this discipline involves the threat of being taken over by groups who are more aligned with stockholder interests.

Which of the following statements about the corporate form of business organization is incorrect?

If a firm's managers want to maximize stock price it is in their best interests to operate efficient, low-cost plants, develop new and safe products that consumers want, and maintain good relationships with customers, suppliers, creditors, and the communities in which they operate.

In a competitive marketplace "good ethics" is a wonderful idea but an impractical standard.There are simply too few benefits to be gained from maintaining high business ethics.

The term multinational corporation is used to describe a firm that operates in two more countries.