Question 1

In a corporation, the members of the board of directors are elected by the

Accepted Answer

A)  chief executive officer. 
B)  creditors. 
C)  stockholders. 
D)  employees. 
A)  chief executive officer. 
B)  creditors. 
C)  stockholders. 
D)  employees.

Question 2

The conflict between the goals of a firm's owners and the goals of its non-owner managers is

Accepted Answer

A)  the agency problem. 
B)  incompatibility. 
C)  serious only when profits decline. 
D)  of little importance in most large U.S. firms. 
A)  the agency problem. 
B)  incompatibility. 
C)  serious only when profits decline. 
D)  of little importance in most large U.S. firms.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Johnson, Inc. has just ended the calendar year making a sale in the amount of $10,000 of merchandise purchased during the year at a total cost of $7,000. Although the firm paid in full for the merchandise during the year, it has yet to collect at year end from the customer. The net profit and cash flow from this sale for the year are

Accepted Answer

A)  $3,000 and $10,000, respectively. 
B)  $3,000 and -$7,000, respectively. 
C)  $7,000 and -$3,000, respectively. 
D)  $3,000 and $7,000, respectively. 
A)  $3,000 and $10,000, respectively. 
B)  $3,000 and -$7,000, respectively. 
C)  $7,000 and -$3,000, respectively. 
D)  $3,000 and $7,000, respectively.

Question 5

As the risk of a stock investment increases, investors'

Accepted Answer

A)  return will increase. 
B)  return will decrease. 
C)  required rate of return will decrease. 
D)  required rate of return will increase. 
A)  return will increase. 
B)  return will decrease. 
C)  required rate of return will decrease. 
D)  required rate of return will increase.

Question 6

The corporate treasurer is the officer responsible for the firm's accounting activities, such as corporate accounting, tax management, financial accounting, and cost accounting.

Accepted Answer

A) True 
 B)False

Question 7

Marginal cost-benefit analysis states that financial decisions should be made and actions taken only when added benefits exceed added costs.

Accepted Answer

A) True 
 B)False

Question 8

The accountant may be responsible for any of the following EXCEPT

Accepted Answer

A)  processing purchase orders and invoices. 
B)  ensuring accounts payable are paid on time. 
C)  preparing the monthly income statement. 
D)  analyzing the mix of current to fixed assets. 
A)  processing purchase orders and invoices. 
B)  ensuring accounts payable are paid on time. 
C)  preparing the monthly income statement. 
D)  analyzing the mix of current to fixed assets.

Question 9

The financial manager's financing decisions determine

Accepted Answer

A)  both the mix and the type of assets found on the firm's balance sheet. 
B)  the most appropriate mix of short-term and long-term financing. 
C)  both the mix and the type of assets and liabilities found on the firm's balance sheet. 
D)  the proportion of the firm's earnings to be paid as dividend. 
A)  both the mix and the type of assets found on the firm's balance sheet. 
B)  the most appropriate mix of short-term and long-term financing. 
C)  both the mix and the type of assets and liabilities found on the firm's balance sheet. 
D)  the proportion of the firm's earnings to be paid as dividend.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

To achieve the goal of profit maximization for each alternative being considered, the financial manager would select the one that is expected to result in the highest monetary return.

Accepted Answer

A) True 
 B)False

Question 12

If a company's managers are NOT owners of the company, then they are

Accepted Answer

A)  dealers. 
B)  agents. 
C)  outsiders. 
D)  brokers. 
A)  dealers. 
B)  agents. 
C)  outsiders. 
D)  brokers.

Question 13

All of the following are key strengths of a corporation EXCEPT

Accepted Answer

A)  access to capital markets. 
B)  limited liability. 
C)  low organization costs. 
D)  readily transferable ownership. 
A)  access to capital markets. 
B)  limited liability. 
C)  low organization costs. 
D)  readily transferable ownership.

In a corporation, the members of the board of directors are elected by the

The conflict between the goals of a firm's owners and the goals of its non-owner managers is

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

As the risk of a stock investment increases, investors'

The corporate treasurer is the officer responsible for the firm's accounting activities, such as corporate accounting, tax management, financial accounting, and cost accounting.

Marginal cost-benefit analysis states that financial decisions should be made and actions taken only when added benefits exceed added costs.

The accountant may be responsible for any of the following EXCEPT

The financial manager's financing decisions determine

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

To achieve the goal of profit maximization for each alternative being considered, the financial manager would select the one that is expected to result in the highest monetary return.

If a company's managers are NOT owners of the company, then they are

All of the following are key strengths of a corporation EXCEPT

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

In a corporation, the members of the board of directors are elected by the

The conflict between the goals of a firm's owners and the goals of its non-owner managers is

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

As the risk of a stock investment increases, investors'

The corporate treasurer is the officer responsible for the firm's accounting activities, such as corporate accounting, tax management, financial accounting, and cost accounting.

Marginal cost-benefit analysis states that financial decisions should be made and actions taken only when added benefits exceed added costs.

The accountant may be responsible for any of the following EXCEPT

The financial manager's financing decisions determine

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

To achieve the goal of profit maximization for each alternative being considered, the financial manager would select the one that is expected to result in the highest monetary return.

If a company's managers are NOT owners of the company, then they are

All of the following are key strengths of a corporation EXCEPT

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