fmt1 - Chapter 1 Introduction to Corporate Finance Chapter...

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Chapter 1 Introduction to Corporate Finance Chapter 01 Quiz A Student Name _________________________ Student ID ____________ ________ 1. Determining the mix of debt and equity to be used to finance a firm is a: a. capital budgeting decision. b.working capital management decision. c. capital structure decision. ________ 2. Which one of the following correctly describes the management structure of a firm as presented in the textbook? a. the data processing manager reports to the treasurer b.the treasurer reports to the controller c. the cash manager reports to the treasurer d.the treasurer reports to the president ________ 3. The owner of a sole proprietorship: a. has unlimited legal liability only if he or she is actively involved in the daily operations of the business. b.is personally liable for all of the company’s debts. c. has created an organization with an unlimited life. d.suffers from double taxation. ________ 4. Which one of the following statements concerning partnerships is correct? a. All partners enjoy limited liability if they create a general partnership of equal shares. b.A limited partner actively participates in running the partnership on a daily basis. c. A general partnership terminates whenever one general partner decides to sell her share of the business. d.A general partnership has an unlimited life while a limited partnership has a limited life. ________ 5. Which one of the following statements concerning corporations is correct? a. The rules describing how a corporation regulates its own existence are set forth in the bylaws. b.The procedures to be followed for electing corporate directors are included in the articles of incorporation. c. Corporate income is taxed only when the corporate earnings are distributed to shareholders. d.A corporation is the easiest form of business entity to create. ________ 6. A corporation borrows money using: a. its own name. b. the names of its directors. c. the name of its CEO. ________ 7. Owners prefer that LLCs be taxed like a: a. sole proprietorship. b. partnership. c. corporation. ________ 8.
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fmt1 - Chapter 1 Introduction to Corporate Finance Chapter...

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