award: 2.50 out of 2.50 points Which one of the following terms is defined as the management of a firm's long-term investments? working capital management financial allocation agency cost analysis capital budgeting capital structure Refer to section 1.1 Multiple Choice Difficulty: Easy Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager. Section: 1.1 Which one of the following terms is defined as the mixture of a firm's debt and equity financing? working capital management cash management cost analysis capital budgeting capital structure Refer to section 1.1 Multiple Choice Difficulty: Easy Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager. Section: 1.1 A business partner whose potential financial loss in the partnership will not exceed his or her investment in that partnership is called a: generally partner. sole proprietor. limited partner. corporate shareholder. zero partner. Refer to section 1.2 Which of the following questions are addressed by financial managers? I. limited partnership. and IV only I. III. The controller reports to the president. How should a product be marketed? II. II. and IV Which one of the following correctly defines the upward chain of command in a typical corporate organizational structure? The vice president of finance reports to the chairman of the board. sole proprietorship. Should the firm borrow more money? IV. Refer to section 1. The treasurer reports to the vice president of finance. and III only II. II. general partnership. The chief operations officer reports to the vice president of production.2 A business created as a distinct legal entity and treated as a legal "person" is called a: corporation.1 Which one of the following is a capital budgeting decision? determining how many shares of stock to issue deciding whether or not to purchase a new machine for the production line deciding how to refinance a debt issue that is maturing determining how much inventory to keep on hand determining how much money should be kept in the checking account . Should customers be given 30 or 45 days to pay for their credit purchases? III. Should the firm acquire new equipment? I and IV only II and III only I. unlimited liability company. Section: 1.Multiple Choice Difficulty: Easy Learning Objective: 01-03 The financial implications of the different forms of business organization. The chief executive officer reports to president. III. general partner II. III. and IV only II. II. dependability of future cash flows IV. project start up costs II. and IV Which of the following accounts are included in working capital management? I. accounts payable II.1 Multiple Choice Difficulty: Easy Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager. and III only II.1 Which of the following individuals have unlimited liability based on their ownership interest? I. II. sole proprietor . III.Refer to section 1. II. accounts receivable III. timing of all projected cash flows III. Section: 1. and IV only I. fixed assets IV. dollar amount of each projected cash flow I and IV only I. and IV only Which one of the following is a working capital management decision? determining the amount of equipment needed to complete a job determining whether to pay cash for a purchase or use the credit offered by the supplier determining the amount of long-term debt required to complete a project determining the number of shares of stock to issue to fund an acquisition determining whether or not a project should be accepted Refer to section 1. III. and IV only I. inventory I and II only I and III only II and IV only I.1 Which of the following should a financial manager consider when analyzing a capital budgeting project? I. II. II. and III only I.2 A general partner: is personally responsible for all the partnership debts. unlimited firm life I and II only III and IV only I. and IV only Refer to section 1.III. Refer to section 1. faces double taxation whereas a limited partner does not.2 hich one of the following best describes the primary advantage of being a limited partner instead of a general partner? tax-free income active participation in the firm's activities no potential financial loss greater control over the business affairs of the partnership maximum loss limited to the capital invested Refer to section 1. II. and IV only II. III.2 Which of the following are advantages of the corporate form of business ownership? I. ability to raise capital IV.2 . has a maximum loss equal to his or her equity investment. and IV Refer to section 1. stockholder IV. II. and IV only I. double taxation III. III. limited partner II only I and II only II and IV only I. receives a salary in lieu of a portion of the profits. limited liability for firm debt II. has no say over a firm's daily operations. III. payment of dividends III. new loan proceeds IV. . involved a proxy. and IV only Refer to section 1.5 Which one of the following is a primary market transaction? sale of currently outstanding stock by a dealer to an individual investor sale of a new share of stock to an individual investor stock ownership transfer from one shareholder to another shareholder gift of stock from one shareholder to another shareholder gift of stock by a shareholder to a family member Shareholder A sold 500 shares of ABC stock on the New York Stock Exchange. was facilitated in the secondary market. 28. payment of government taxes I and III only II and IV only I and IV only I. II.2 Which of the following represent cash outflows from a corporation? I. was a private placement. issuance of securities II. and IV only II. occurred in a dealer market. III. This transaction: took place in the primary market.Which one of the following business types is best suited to raising large amounts of capital? sole proprietorship limited liability company corporation general partnership limited partnership Refer to section 1. 5 . Refer to section 1. NASDAQ is an auction market.award: 2. NASDAQ is an OTC market. NASDAQ is a dealer market. NASDAQ is an electronic market.50 out of 2.50 points Which one of the following statements concerning NASDAQ is FALSE? It is easier to be listed on NASDAQ than on the NYSE.