Spring07-Solution_quiz1

Spring07-Solution_quiz1 - BUS 170 Fundamentals of Finance...

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BUS 170 – Fundamentals of Finance Spring 2007 Quiz 1 Last Name: __________________________First Name: _____________________ Class Time: _________________________ Instructions: Record the correct answer in the space provided. You must clearly report the letter answer you select. For the questions 5-10, you must show the complete and correct solution with computations. When reporting the solutions to the questions 5-10 you must label all the amounts you use in the computations. Your computations and solutions to the questions must be clear and easy to understand. Grading: There are 10 multiple-choice questions. Each question is worth 5 points. No partial-credit is given in this test. For the questions 5-10, you can only receive 5 points if you record the correct letter answer in the space provided along with the complete and correct solution for the problem. If you select the correct letter, but you do not provide a complete and consistent solution for the problems, you will not receive any points. 1
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SECTION I 1. What should be the main goal of the financial manager? a) Minimize the risk of bankruptcy. b) Maximize the market value of the existing owners’ equity. c) Maximize the current book value per share of the existing stock. d) Maximize the sales or market shares. e) Minimize the volatility of the earnings per share (EPS). ANSWER: ________ 2. Which of the following is most correct about the different forms of business? a) The owner of a sole proprietorship benefits from limited liability for business debts. b) A partnership is similar to a sole proprietorship, except that there are two or more owners. In a general partnership, all the partners share in gains or losses, and all have limited liability for all partnership debts, not just some particular share. c)
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This note was uploaded on 09/08/2010 for the course BUS 170 at San Jose State University .

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Spring07-Solution_quiz1 - BUS 170 Fundamentals of Finance...

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