Exam 1: The Financial Manager and the Company

With regard to information, a central idea of fairness suggests that

Explain what should be the goal of the firm.

A sole proprietorship is an owner's only business.

A director who is not an employee of the firm is called

Which corporate officer, when he or she is guilty of serious misconduct, can subject the firm to the most serious losses in financial wealth?

What is the major complaint concerning the Sarbanes-Oxley Act of 2002 by firms?

Which of the following individuals is typically most responsible for managing a large corporation's financial function?

Unlimited liability means that the owner of a firm is responsible for paying all the firm's bills.

Which organizational form accounts for 90 percent of the revenues of all firms in the United States?

Capital assets are generally short term in nature.

The owners of a firm are unaffected by agency costs.

The treasurer of a corporation usually reports to the CFO of the firm.

A stakeholder is

The cash remaining after the firm has met its operating expenses, payments to creditors, and taxes is called

Explain how agency costs might be found within a firm whose CEO owns no shares in the firm and whose compensation package is unaffected by the profits (cash or accounting profits) of the firm.

Intangible assets generate most of a manufacturing firm's cash flows.

You have a friend who tells you that ethics are completely unimportant in business since a number of laws have been set up for us to know the rules of the game.

When analysts and investors determine the value of a firm's stock, they should consider

Cash dividends are paid out of

Which organizational form best enables a firm to sell its securities to the market?