FINMAN1 QUIZ#1 Summer AY 10-11

FINMAN1 QUIZ#1 Summer AY 10-11 - FINMAN1 QUIZ # 1 Summer AY...

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FINMAN1 QUIZ # 1 Summer AY 10-11 True/False 1.One of the problems associated with profit maximization is that it ignores the timing of a project’s return. 2.In a general partnership, all partners have unlimited liability for the actions of any one partner when that partner is conducting business for the firm. 3.There is no legal distinction made between the assets of the business and the personal assets of the owners in the limited partnership. 4.In order to maximize shareholder wealth, a firm must consider historical costs as an integral part of their decision-making. 5.Even though diversification can eliminate risk, it also makes it more difficult to measure a project’s or an asset’s risk. 6. Under current accounting rules, plant and equipment appear on a company’s balance sheet valued at replacement value. 7. Dividends paid to a firm’s stockholders, both preferred and common stockholders, are tax- deductible to the paying company. Multiple Choice 8.Consider the timing of the profits of the following certain investment projects: Profit L S Year 1 $ 0 $ 3000 Year 2 $ 3000 $ 0 A. Project S is preferred to Project L. B. Project L is preferred to Project S.
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This note was uploaded on 06/26/2011 for the course ACCT 101 taught by Professor Gobaco during the Spring '11 term at De La Salle University.

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FINMAN1 QUIZ#1 Summer AY 10-11 - FINMAN1 QUIZ # 1 Summer AY...

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