Finance Quiz: Identifying Financial Management Concepts - Prof. Thomas Miller,Jr., Quizzes of Finance

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Score: 20  out  of  20  points  (100%)  1. award: 1  out  of 1.00  point     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  2. award: 1  out  of 1.00  point    3. award: 1  out  of 1.00  point   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 Which  one  of  the  following  is  defined  as  a  firm's  short-­term assets  and  its  short-­term  liabilities? working  capital debt investment  capital net  capital capital  structure Refer  to  section  1.1  8. award: 1  out  of 1.00  point   Which  one  of  the  following  terms  is  defined  as  a  conflict  of interest  between  the  corporate  shareholders  and  the corporate  managers? articles  of  incorporation corporate  breakdown agency  problem bylaws legal  liability Refer  to  section  1.4  9. award: 1  out  of 1.00  point   A  stakeholder  is: a  person  who  owns  shares  of  stock. any  person  who  has  voting  rights  based on  stock  ownership  of  a  corporation. a  person  who  initially  founded  a  firm  and currently  has  management  control  over that  firm. a  creditor  to  whom  a  firm  currently  owes money. any  person  or  entity  other  than  a stockholder  or  creditor  who  potentially has  a  claim  on  the  cash  flows  of  a  firm. Refer  to  section  1.4  10. award: 1  out  of 1.00  point   Which  of  the  following  questions  are  addressed  by financial  managers? I.  How  should  a  product  be  marketed? II.  Should  customers  be  given  30  or  45  days  to  pay  for their  credit  purchases? III.  Should  the  firm  borrow  more  money? IV.  Should  the  firm  acquire  new  equipment? I  and  IV  only II  and  III  only I,  II,  and  III  only II,  III,  and  IV  only I,  II,  III,  and  IV Refer  to  section  1.1  13. award: 1  out  of 1.00  point   Which  of  the  following  accounts  are  included  in  working capital  management? I.  accounts  payable II.  accounts  receivable III.  fixed  assets IV.  inventory I  and  II  only I  and  III  only II  and  IV  only I,  II,  and  IV  only II,  III,  and  IV  only Refer  to  section  1.1  14. award: 1  out  of 1.00  point   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  1.1  15. award: 1  out  of 1.00  point   Which  one  of  the  following  statements  concerning  a  sole proprietorship  is  correct? A  sole  proprietorship  is  designed  to protect  the  personal  assets  of  the  owner. The  profits  of  a  sole  proprietorship  are subject  to  double  taxation. The  owner  of  a  sole  proprietorship  is personally  responsible  for  all  of  the company's  debts. There  are  very  few  sole  proprietorships remaining  in  the  U.S.  today. A  sole  proprietorship  is  structured  the same  as  a  limited  liability  company. Refer  to  section  1.2  18. award: 1  out  of 1.00  point   Which  one  of  the  following  best  states  the  primary  goal  of financial  management? maximize  current  dividends  per  share maximize  the  current  value  per  share increase  cash  flow  and  avoid  financial distress minimize  operational  costs  while maximizing  firm  efficiency maintain  steady  growth  while  increasing current  profits Refer  to  section  1.3  19. award: 1  out  of 1.00  point   Why  should  financial  managers  strive  to  maximize  the current  value  per  share  of  the  existing  stock? doing  so  guarantees  the  company  will grow  in  size  at  the  maximum  possible rate doing  so  increases  employee  salaries because  they  have  been  hired  to represent  the  interests  of  the  current shareholders because  this  will  increase  the  current dividends  per  share because  managers  often  receive  shares of  stock  as  part  of  their  compensation Refer  to  section  1.3  20. award: 1  out  of 1.00  point   Which  of  the  following  help  convince  managers  to  work  in the  best  interest  of  the  stockholders?  Assume  there  are  no golden  parachutes. I.  compensation  based  on  the  value  of  the  stock II.  stock  option  plans III.  threat  of  a  company  takeover IV.  threat  of  a  proxy  fight I  and  II  only III  and  IV  only I,  II,  and  III  only I,  III,  and  IV  only I,  II,  III,  and  IV Refer  to  section  1.4