FI360-Mid Term-4.0

FI360-Mid Term-4.0 - Introduction Financial Management...

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Introduction Financial Management Instructor: Keith T. Jones, MBA Park University-Fort Bliss FI360 Mid-Term Name Jayme Anderson Which of the following is not one of the five basic corporate finance functions? a. External financing function b. Capital budgeting function c. Risk management d. Auditing 2. Keith and Jesus have decided to start a travel business call Excellent Adventures. Since their business primarily involves time-travel their clients may be harmed during a small but significant portion of the travels. Consequently, Keith and Jesus would like a business form that will shield their personal wealth from any legal claims that the firm might be subject to after one of the travel mishaps. If Keith & Jesus are the only investors in this U.S. domiciled firm, which legal from or organization would be best for Excellent Adventures to protect both Keith and Jesus? a. Sole proprietorship b. Partnership c. Limited partnership d. Corporation 3. Agency theory examines the relationship between the a. Shareholders of the firm and firm’s investment banker b. Owners of the firm and the managers of the firm c. Board of directors and the large institutional investors d. Shareholders and the firm’s transfer agent 4. Which of the following is a strength of a sole proprietorship a. Unlimited life b. Easy to form FI-360 Financial Management Page 1
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c. Limited liability d. Limited access to capital 5. Last National bank offers a CD paying 7% interest (compounded annually).
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FI360-Mid Term-4.0 - Introduction Financial Management...

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