Question 1

Return and risk are the key determinants of share price, which represents the wealth of the owners in the firm.

Accepted Answer

A) True 
 B)False

Question 2

Corporations are the most common form of business organization.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Benefits to incorporating a small business with one owner include all of the following EXCEPT

Accepted Answer

A)  the ability to raise capital through public offerings. 
B)  the small business tax credit on income below $200,000. 
C)  the ability to limit liability to the amount invested in the company. 
D)  the $500,000 capital gains exemption for qualified small business shares. 
A)  the ability to raise capital through public offerings. 
B)  the small business tax credit on income below $200,000. 
C)  the ability to limit liability to the amount invested in the company. 
D)  the $500,000 capital gains exemption for qualified small business shares.

Question 5

The implementation of a pro-active ethics program is expected to result in

Accepted Answer

A)  a positive corporate image and increased respect, a reduction in risk, and enhanced cash flow resulting in an increase in share price. 
B)  an increased share price resulting from a decrease in risk, but is not expected to affect cash flows. 
C)  a positive corporate image and increased respect, but is not expected to affect share price. 
D)  a positive corporate image and increased respect, but is not expected to affect cash flows. 
A)  a positive corporate image and increased respect, a reduction in risk, and enhanced cash flow resulting in an increase in share price. 
B)  an increased share price resulting from a decrease in risk, but is not expected to affect cash flows. 
C)  a positive corporate image and increased respect, but is not expected to affect share price. 
D)  a positive corporate image and increased respect, but is not expected to affect cash flows.

Question 6

Making investment decisions includes all of the following EXCEPT

Accepted Answer

A)  machinery. 
B)  buildings. 
C)  notes payable. 
D)  inventory. 
A)  machinery. 
B)  buildings. 
C)  notes payable. 
D)  inventory.

Question 7

Bayside Equipment is considering buying new equipment. The existing machine produces 10 000 units a day at a cost of $2 per unit. The new machine will produce 15 000 at a cost of $1.50 a unit. BAyside sells each unit for $4. What is the marginal benefit of the new machine

Accepted Answer

A)  $7 500 
B)  $20 000 
C)  $22 500 
D)  $38 500 
A)  $7 500 
B)  $20 000 
C)  $22 500 
D)  $38 500

Question 8

Marginal analysis states that financial decisions should be made and actions taken only when added benefits exceeds added costs.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Jupitor Inc. is a non-public corporation owned by two Saskatchewan residents; Jupitor would be considered a Canadian Controlled Private Corporation for taxation purposes.

Accepted Answer

A) True 
 B)False

Question 11

A recent ethics survey indicated the opinion that maintaining high ethical standards

Accepted Answer

A)  strengthened a firm's competitive position. 
B)  weakened a firm's competitive position, particularly in foreign markets. 
C)  was difficult to enforce. 
D)  had no effect on a firm's competitive position. 
A)  strengthened a firm's competitive position. 
B)  weakened a firm's competitive position, particularly in foreign markets. 
C)  was difficult to enforce. 
D)  had no effect on a firm's competitive position.

Question 12

Canada's industry minister recently travelled to Japan on business and took his wife and three children. The minister paid for his wife and childrens' costs out of his own pocket. The minister

Accepted Answer

A)  has created an agency problem by taking his family when travelling on government business. 
B)  appears to have done nothing wrong in the fulfillment of his duties to the crown. 
C)  has failed in his fiduciary responsibility to the public and should step down. 
D)  has created an agency cost by charging the family's costs to his personal account. 
A)  has created an agency problem by taking his family when travelling on government business. 
B)  appears to have done nothing wrong in the fulfillment of his duties to the crown. 
C)  has failed in his fiduciary responsibility to the public and should step down. 
D)  has created an agency cost by charging the family's costs to his personal account.

Question 13

The true owners of the corporation is/are the

Accepted Answer

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

Question 14

The key variables in the owner wealth maximization process are

Accepted Answer

A)  earnings per share and risk. 
B)  earnings per share and share price. 
C)  profits and risk. 
D)  cash flows and risk. 
A)  earnings per share and risk. 
B)  earnings per share and share price. 
C)  profits and risk. 
D)  cash flows and risk.

Question 15

The accountant's primary function is

Accepted Answer

A)  making decisions based on financial data. 
B)  the collection and presentation of financial data. 
C)  planning cash flows. 
D)  evaluating the financial statements. 
A)  making decisions based on financial data. 
B)  the collection and presentation of financial data. 
C)  planning cash flows. 
D)  evaluating the financial statements.

Question 16

The financial analyst administers the firm's credit policy by analyzing or managing the evaluation of credit applications, extending credit, and monitoring and collecting accounts receivable.

Accepted Answer

A) True 
 B)False

Question 17

The dominant form of organization with respect to revenues and net income is the

Accepted Answer

A)  sole proprietorship. 
B)  corporation. 
C)  limited partnership. 
D)  partnership. 
A)  sole proprietorship. 
B)  corporation. 
C)  limited partnership. 
D)  partnership.

Question 18

Financial managers evaluating decision alternatives or potential actions must consider

Accepted Answer

A)  only risk. 
B)  both risk and return. 
C)  only return. 
D)  risk, return, and the impact on share price. 
A)  only risk. 
B)  both risk and return. 
C)  only return. 
D)  risk, return, and the impact on share price.

Question 19

In a corporation, ethical decisions occur at all levels within the hierarchy. If you were an ethicsconsultant, which ethical behavior would concern you the most?

Accepted Answer

A)  a food-wholesaler's cashier rounds all weights down when calculating the cost of fruits and vegetables for customers 
B)  a strawberry grower sprays a legalized chemical on its berries to help them turn red quicker 
C)  a medical research company tests cancer drugs on mice 
D)  an investment advisor tells his client that a company near bankruptcy has excellent growth prospects in order to get his sales commission 
A)  a food-wholesaler's cashier rounds all weights down when calculating the cost of fruits and vegetables for customers 
B)  a strawberry grower sprays a legalized chemical on its berries to help them turn red quicker 
C)  a medical research company tests cancer drugs on mice 
D)  an investment advisor tells his client that a company near bankruptcy has excellent growth prospects in order to get his sales commission

Question 20

In a partnership, a partner can readily transfer his/her wealth to other partners.

Accepted Answer

A) True 
 B)False

Return and risk are the key determinants of share price, which represents the wealth of the owners in the firm.

Corporations are the most common form of business organization.

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

Benefits to incorporating a small business with one owner include all of the following EXCEPT

The implementation of a pro-active ethics program is expected to result in

Making investment decisions includes all of the following EXCEPT

Bayside Equipment is considering buying new equipment. The existing machine produces 10 000 units a day at a cost of $2 per unit. The new machine will produce 15 000 at a cost of $1.50 a unit. BAyside sells each unit for $4. What is the marginal benefit of the new machine

Marginal analysis states that financial decisions should be made and actions taken only when added benefits exceeds added costs.

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

Jupitor Inc. is a non-public corporation owned by two Saskatchewan residents; Jupitor would be considered a Canadian Controlled Private Corporation for taxation purposes.

A recent ethics survey indicated the opinion that maintaining high ethical standards

Canada's industry minister recently travelled to Japan on business and took his wife and three children. The minister paid for his wife and childrens' costs out of his own pocket. The minister

The true owners of the corporation is/are the

The key variables in the owner wealth maximization process are

The accountant's primary function is

The financial analyst administers the firm's credit policy by analyzing or managing the evaluation of credit applications, extending credit, and monitoring and collecting accounts receivable.

The dominant form of organization with respect to revenues and net income is the

Financial managers evaluating decision alternatives or potential actions must consider

In a corporation, ethical decisions occur at all levels within the hierarchy. If you were an ethicsconsultant, which ethical behavior would concern you the most?

In a partnership, a partner can readily transfer his/her wealth to other partners.

Financial Statements, Cash Flows, and Taxes

Financial Statement Analysis

Financial Planning and Forecasting

Financial Markets, Institutions, and Securities

Time Value of Money

Risk and Return

Valuation of Financial Securities

The Cost of Capital

Leverage and Capital Structure

Dividend Policy

Capital Budgeting: Principles and Techniques

Dealing With Project Risk and Other Topics in Capital Budgeting

Working Capital and Management of Current Assets

Management of Current Liabilities

Lease Financing: Concepts and Techniques

Corporate Securities, Derivatives, and Swaps

Mergers and Acquisitions, and Business Failure

International Corporate Finance

Filters

Exam 1: Overview of Corporate Finance

Return and risk are the key determinants of share price, which represents the wealth of the owners in the firm.

Corporations are the most common form of business organization.

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

Benefits to incorporating a small business with one owner include all of the following EXCEPT

The implementation of a pro-active ethics program is expected to result in

Making investment decisions includes all of the following EXCEPT

Bayside Equipment is considering buying new equipment. The existing machine produces 10 000 units a day at a cost of $2 per unit. The new machine will produce 15 000 at a cost of $1.50 a unit. BAyside sells each unit for $4. What is the marginal benefit of the new machine

Marginal analysis states that financial decisions should be made and actions taken only when added benefits exceeds added costs.

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

Jupitor Inc. is a non-public corporation owned by two Saskatchewan residents; Jupitor would be considered a Canadian Controlled Private Corporation for taxation purposes.

A recent ethics survey indicated the opinion that maintaining high ethical standards

Canada's industry minister recently travelled to Japan on business and took his wife and three children. The minister paid for his wife and childrens' costs out of his own pocket. The minister

The true owners of the corporation is/are the

The key variables in the owner wealth maximization process are

The accountant's primary function is

The financial analyst administers the firm's credit policy by analyzing or managing the evaluation of credit applications, extending credit, and monitoring and collecting accounts receivable.

The dominant form of organization with respect to revenues and net income is the

Financial managers evaluating decision alternatives or potential actions must consider

In a corporation, ethical decisions occur at all levels within the hierarchy. If you were an ethicsconsultant, which ethical behavior would concern you the most?

In a partnership, a partner can readily transfer his/her wealth to other partners.

Financial Statements, Cash Flows, and Taxes

Financial Statement Analysis

Financial Planning and Forecasting

Financial Markets, Institutions, and Securities

Time Value of Money

Risk and Return

Valuation of Financial Securities

The Cost of Capital

Leverage and Capital Structure

Dividend Policy

Capital Budgeting: Principles and Techniques

Dealing With Project Risk and Other Topics in Capital Budgeting

Working Capital and Management of Current Assets

Management of Current Liabilities

Lease Financing: Concepts and Techniques

Corporate Securities, Derivatives, and Swaps

Mergers and Acquisitions, and Business Failure

International Corporate Finance

Filters