practice quiz 1

practice quiz 1 - BUSI 2504 Fall 2010 Practice Quiz 1 1. A...

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Page 1 BUSI 2504 Fall 2010 Practice Quiz 1 1. A business owned by a single individual is called a(n): A) Corporation. B) Sole proprietorship. C) Partnership. D) Closed receivership. E) Open structure. 2. The person generally directly responsible for overseeing the cash and credit functions, financial planning, and capital expenditures is the: A) treasurer. B) director. C) controller. D) chairman of the board. E) chief operations officer. 3. The primary goal of financial management is to: A) maximize current dividends per share of the existing stock. B) maximize the current value per share of the existing stock. C) avoid financial distress. D) minimize operational costs and maximize firm efficiency. E) maintain steady growth in both sales and net earnings. 4. Which of the following is an advantage of ownership of a corporation compared to that of a sole proprietorship? A) The owners of the corporation have unlimited liability for the firm's debts. B) It is the simplest to start. C) The corporation has an unlimited life. D) Dividends received by the corporation's shareholders are tax-exempt. E) It is more difficult to transfer ownership in a corporation. 5. Which of the following is a type of agency cost? A) The cost of an audit of the firm's financial statements. B) The cost of a corporate jet needed to keep tabs on foreign operations. C) Salaries paid to the firm's managers. D) The costs of financing the firm. E) The cost of buying insurance on the firm's assets.
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Page 2 6. Which one of the following actions is the best example of an agency problem? A) Paying management bonuses based on the number of store locations opened during the year B) Paying management bonuses based on the current market value of the firm's stock C) Accepting a project that enhances both management salaries and the market value of the firm's stock
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This note was uploaded on 12/15/2010 for the course BUSI 2504 taught by Professor Yuiry during the Fall '08 term at Carleton CA.

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practice quiz 1 - BUSI 2504 Fall 2010 Practice Quiz 1 1. A...

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