Question 1

Managers of corporations need to act in an ethical manner

Accepted Answer

A)  because ethics violations will be punished by the law. 
B)  because a business must be trusted by investors, customer and the public if it is to succeed. 
C)  because business managers must answer to a higher authority. 
D)  because ethical behavior is its own justification. 
A)  because ethics violations will be punished by the law. 
B)  because a business must be trusted by investors, customer and the public if it is to succeed. 
C)  because business managers must answer to a higher authority. 
D)  because ethical behavior is its own justification.

Question 2

What are the three basic questions addressed by the study of investments?

Accepted Answer

1. What investments should the

Question 3

If managers are making decisions to maximize shareholder wealth, then they are primarily concerned with making decisions that should

Accepted Answer

A)  positively affect profits. 
B)  increase the market value of the firm's common stock. 
C)  either increase or have no effect on the value of the firm's common stock. 
D)  accomplish all of the above. 
A)  positively affect profits. 
B)  increase the market value of the firm's common stock. 
C)  either increase or have no effect on the value of the firm's common stock. 
D)  accomplish all of the above.

Question 4

Which of the following forms of business organization is the dominant economic force in the United States?

Accepted Answer

A)  The sole proprietorship 
B)  The general partnership 
C)  The limited partnership 
D)  The joint venture 
E)  The corporation 
A)  The sole proprietorship 
B)  The general partnership 
C)  The limited partnership 
D)  The joint venture 
E)  The corporation

Question 5

Consider cash flows for Projects X and Y such as: Project X Project Y
Year 1 $3000 $ 0
Year 2 $ 0 $3000
A rational person would prefer receiving cash flows sooner because

Accepted Answer

A)  the money can be reinvested. 
B)  the money is nice to have around. 
C)  the investor may be tired of a particular investment. 
D)  the investor is indifferent to either proposal. 
A)  the money can be reinvested. 
B)  the money is nice to have around. 
C)  the investor may be tired of a particular investment. 
D)  the investor is indifferent to either proposal.

Question 6

Owners must register and pay yearly fees to their State of residence when establishing a sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 7

In a sole proprietorship, the owner is personally responsible without limitation for the liabilities incurred.

Accepted Answer

A) True 
 B)False

Question 8

In a general partnership, all partners have unlimited liability for the actions of any one partner when that partner is conducting business for the firm.

Accepted Answer

A) True 
 B)False

Question 9

For the risk-return principle implies that the more risky a given course of action, the higher the expected return must be.

Accepted Answer

A) True 
 B)False

Question 10

A reputation for unethical behavior can negatively affect the value of a company's stock.

Accepted Answer

A) True 
 B)False

Question 11

Assume that you are starting a business. Further assume that the business is expected to grow very quickly and a great deal of capital will be needed soon. What type of business organization would you choose?

Accepted Answer

A)  Corporation 
B)  General Partnership 
C)  Limited liability company 
D)  Limited partnership 
A)  Corporation 
B)  General Partnership 
C)  Limited liability company 
D)  Limited partnership

Question 12

Capital structure refers to the financing of long-term investments.

Accepted Answer

A) True 
 B)False

Question 13

The area of finance that deals with long-term investment decisions is known as

Accepted Answer

A)  capital structure. 
B)  working capital management. 
C)  financial strategy. 
D)  capital budgeting. 
A)  capital structure. 
B)  working capital management. 
C)  financial strategy. 
D)  capital budgeting.

Question 14

The sole proprietorship is the same as the individual for liability purposes.

Accepted Answer

A) True 
 B)False

Question 15

Working capital management refers to

Accepted Answer

A)  long-term financing decisions. 
B)  the management of cash flows. 
C)  investing in product development. 
D)  capital structure. 
A)  long-term financing decisions. 
B)  the management of cash flows. 
C)  investing in product development. 
D)  capital structure.

Question 16

One of the problems associated with profit maximization is that it ignores the timing of a project's return.

Accepted Answer

A) True 
 B)False

Question 17

The agency problem arises due to the separation of ownership and control in a corporation.

Accepted Answer

A) True 
 B)False

Question 18

Briefly discuss the incentives for financial managers to conduct their business in an ethical manner.

Accepted Answer

Extreme ethical lapses such as those evi

Question 19

In terms of organizational costs, which of the following sequences is generally correct, moving from lowest to highest cost?

Accepted Answer

A)  General partnership, sole proprietorship, limited partnership, corporation 
B)  Sole proprietorship, general partnership, limited partnership, corporation 
C)  Corporation, limited partnership, general partnership, sole proprietorship 
D)  Sole proprietorship, general partnership, corporation, limited partnership 
A)  General partnership, sole proprietorship, limited partnership, corporation 
B)  Sole proprietorship, general partnership, limited partnership, corporation 
C)  Corporation, limited partnership, general partnership, sole proprietorship 
D)  Sole proprietorship, general partnership, corporation, limited partnership

Question 20

In finance, we assume that investors are generally

Accepted Answer

A)  neutral to risk. 
B)  averse to risk. 
C)  fond of risk. 
D)  none of the above. 
A)  neutral to risk. 
B)  averse to risk. 
C)  fond of risk. 
D)  none of the above.

Managers of corporations need to act in an ethical manner

What are the three basic questions addressed by the study of investments?

If managers are making decisions to maximize shareholder wealth, then they are primarily concerned with making decisions that should

Which of the following forms of business organization is the dominant economic force in the United States?

Consider cash flows for Projects X and Y such as: Project X Project Y Year 1 $3000 $ 0 Year 2 $ 0 $3000 A rational person would prefer receiving cash flows sooner because

Owners must register and pay yearly fees to their State of residence when establishing a sole proprietorship.

In a sole proprietorship, the owner is personally responsible without limitation for the liabilities incurred.

In a general partnership, all partners have unlimited liability for the actions of any one partner when that partner is conducting business for the firm.

For the risk-return principle implies that the more risky a given course of action, the higher the expected return must be.

A reputation for unethical behavior can negatively affect the value of a company's stock.

Assume that you are starting a business. Further assume that the business is expected to grow very quickly and a great deal of capital will be needed soon. What type of business organization would you choose?

Capital structure refers to the financing of long-term investments.

The area of finance that deals with long-term investment decisions is known as

The sole proprietorship is the same as the individual for liability purposes.

Working capital management refers to

One of the problems associated with profit maximization is that it ignores the timing of a project's return.

The agency problem arises due to the separation of ownership and control in a corporation.

Briefly discuss the incentives for financial managers to conduct their business in an ethical manner.

In terms of organizational costs, which of the following sequences is generally correct, moving from lowest to highest cost?

In finance, we assume that investors are generally

Firms and the Financial Market

Understanding Financial Statements, Taxes, and Cash Flows

Financial Analysis-Sizing up Firm Performance

Time Value of Money-The Basics

The Time Value of Money-Annuities and Other Topics

An Introduction to Risk and Return-History of Financial Market Returns

Risk and Return-Capital Market Theory

Debt Valuation and Interest Rates

Stock Valuation

Investment Decision Criteria

Analyzing Project Cash Flows

Risk Analysis and Project Evaluation

The Cost of Capital

Capital Structure Policy

Dividend Policy

Financial Forecasting and Planning

Working Capital Management

International Business Finance

Corporate Risk Management

Filters

Exam 1: Getting Started-Principles of Finance

Managers of corporations need to act in an ethical manner

What are the three basic questions addressed by the study of investments?

If managers are making decisions to maximize shareholder wealth, then they are primarily concerned with making decisions that should

Which of the following forms of business organization is the dominant economic force in the United States?

Consider cash flows for Projects X and Y such as: Project X Project Y Year 1 $3000 $ 0 Year 2 $ 0 $3000 A rational person would prefer receiving cash flows sooner because

Owners must register and pay yearly fees to their State of residence when establishing a sole proprietorship.

In a sole proprietorship, the owner is personally responsible without limitation for the liabilities incurred.

In a general partnership, all partners have unlimited liability for the actions of any one partner when that partner is conducting business for the firm.

For the risk-return principle implies that the more risky a given course of action, the higher the expected return must be.

A reputation for unethical behavior can negatively affect the value of a company's stock.

Assume that you are starting a business. Further assume that the business is expected to grow very quickly and a great deal of capital will be needed soon. What type of business organization would you choose?

Capital structure refers to the financing of long-term investments.

The area of finance that deals with long-term investment decisions is known as

The sole proprietorship is the same as the individual for liability purposes.

Working capital management refers to

One of the problems associated with profit maximization is that it ignores the timing of a project's return.

The agency problem arises due to the separation of ownership and control in a corporation.

Briefly discuss the incentives for financial managers to conduct their business in an ethical manner.

In terms of organizational costs, which of the following sequences is generally correct, moving from lowest to highest cost?

In finance, we assume that investors are generally

Firms and the Financial Market

Understanding Financial Statements, Taxes, and Cash Flows

Financial Analysis-Sizing up Firm Performance

Time Value of Money-The Basics

The Time Value of Money-Annuities and Other Topics

An Introduction to Risk and Return-History of Financial Market Returns

Risk and Return-Capital Market Theory

Debt Valuation and Interest Rates

Stock Valuation

Investment Decision Criteria

Analyzing Project Cash Flows

Risk Analysis and Project Evaluation

The Cost of Capital

Capital Structure Policy

Dividend Policy

Financial Forecasting and Planning

Working Capital Management

International Business Finance

Corporate Risk Management

Filters