Unit II Sample Test Solution(1)

Unit II Sample Test Solution(1) - Unit II Sample Test...

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Unit II Sample Test Solution 2 2 Instructions Before you do anything else: WRITE YOUR NAME ON ALL SHEETS Time: 50 minutes Maximum points possible are marked in the circle next to each problem. The more difficult or more time consuming a problem the more points are awarded. More points are given for documenting your work than for finding the correct result. Make sure you write down how you came up with your answer (except pure word problems 1, 2, 3, 11, 13). Just circling the correct answer will not give you maximum points. Don’t write a novel, a formula or just the numbers you’ve used in your calculation is sufficient. 1. A limited partner: a. has no personal responsibility for the debts incurred by the partnership. b. is guaranteed a return of his or her entire investment in the partnership if the partnership terminates. c. can only control the daily operations for an individual segment of the partnership. d. has minimal control, if any, over the daily operations of the partnership. 2. Which of the following have unlimited personal liability for the debts of the business entity? a. general and limited partners b. sole proprietors and limited partners c. sole proprietors and general partners d. limited partners and common stockholders 3. An agency problem is most apt to exist in which one of the following situations? a. an employee asks for a raise and is denied b. a management decision increases the market value of the firm’s stock c. a board member resigns for personal reasons d. a firm’s board decides to increase management bonuses and forego the normal stock dividend 4. How much tax will a firm owe if its taxable income is $278,350? Taxable Income
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This note was uploaded on 04/05/2011 for the course FIN 350 taught by Professor Debruinne during the Winter '11 term at Grand Valley State University.

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Unit II Sample Test Solution(1) - Unit II Sample Test...

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