fin 1 - A business formed by two or more individuals who...

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Unformatted text preview: A business formed by two or more individuals who each have unlimited liability for all of the firm's business debts is called a: corporation. sole proprietorship. general partnership. limited partnership. limited liability company. A business partner whose potential financial loss in the partnership will not exceed his or her investment in that partnership is called a: generally partner. sole proprietor. limited partner. corporate shareholder. zero partner. 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 Which one of the following functions should be the responsibility of the controller rather than the treasurer? daily cash deposit income tax returns equipment purchase analysis customer credit approval payment to a vendor The decision to issue additional shares of stock is an example of which one of the following? working capital management net working capital decision capital budgeting controller's duties capital structure decision Which one of the following business types is best suited to raising large amounts of capital? sole proprietorship limited liability company corporation general partnership limited partnership Which one of the following best illustrates that the management of a firm is adhering to the goal of financial management? increase in the amount of the quarterly dividend decrease in the per unit production costs increase in the number of shares outstanding decrease in the net working capital increase in the market value per share Which one of the following is an agency cost? accepting an investment opportunity that will add value to the firm increasing the quarterly dividend investing in a new project that creates firm value hiring outside accountants to audit the company's financial statements closing a division of the firm that is operating at a loss 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 Which one of the following is a capital budgeting decision? determining how many shares of stock to issue deciding whether or not to purchase a new machine for the production line deciding how to refinance a debt issue that is maturing determining how much inventory to keep on hand determining how much money should be kept in the checking account Net working capital is defined as: total liabilities minus shareholders' equity. current liabilities minus shareholders' equity. fixed assets minus long-term liabilities. total assets minus total liabilities. current assets minus current liabilities....
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