FINTest 1 - FIN 335 Test 1 Fall 2008 Clay M. Moffett Name:...

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FIN 335 Test 1 Name: _______________________________________ Fall 2008 Clay M. Moffett Questions 1-32 are worth 3 points. Question 33, 34 are worth 5 points. Total point on test is 106 points. Grade is out of 100. Turn in your test and formula sheet when finished with scantron. Good luck! Bonne chance! Viel Glück! Hodně štěstí!! Held og lykke! Lycka till! 1. Which one of the following is a capital structure decision? a. Should a new machine be purchased this year? b. Should the credit terms offered to customers be revised? c. Should debt or equity financing be used to purchase a building? d. Should the level of inventory be increased? 2. Which one of the following functions is generally under the control of the corporate treasurer? a. cost accounting b. tax management c. financial planning d. financial accounting 3. Which one of the following best describes the liability a general partner has for the partnership debts? a. none b. liability limited to amount invested in the firm c. liability limited based on percentage ownership d. unlimited 4. Which one of the following provides you with the greatest control over a firm’s daily operations? a. limited partner b. major stockholder in a corporation c. minor stockholder in a joint stock company d. sole proprietor 5. 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. 6. The Sarbanes-Oxley Act in 2002 is designed to protect the public against: a. a firm’s net operating losses if those losses extend beyond a 2-year period. b. declines in the market value of a firm’s outstanding shares of stock. c. financial malpractice and accounting fraud. d. a firm’s issuing additional shares of stock if the issue will reduce the market value of the current outstanding shares. 7. Who has the ultimate control over a corporation? a. SHAREHOLDERS b. chief executive officer c. chairman of the board d. board of directors
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8. Which one of the following is a primary market transaction? a. Theo, the president of ABC, sells some of his shares in ABC on the NYSE b. ABC offers newly issued shares to the general public c. Tom instructs his broker to sell all of his shares in ABC, Inc. d. Mary gifts shares of ABC stock to her son Use these financial statements to answer questions 9 through 13. Balance Sheet
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FINTest 1 - FIN 335 Test 1 Fall 2008 Clay M. Moffett Name:...

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