Chapter 1 Test 1 Outline

Chapter 1 Test 1 - Chapter 1 Finance 302 Test#1 Outline What is the goal of the firm and why Why are other goals not adequate Managements goal

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Chapter 1 – Finance 302 Test #1 Outline What is the goal of the firm and why? Why are other goals not adequate? Management’s goal should be List the Different Business Organization Types and Advantages/Disadvantages: The way a firm is organized affects financial decisions of the firm. 1. ______________________ – an unincorporated business owned by one individual. Advantages: i. ii. iii. Disadvantages: i. ii. iii. 2. Partnership – an unincorporated business owned by two or more persons. Advantages: i. Easy, cheap to form ii. Few regulations iii. Business pays no taxes Disadvantages: i. Hard to raise capital ii. Limited life iii. Unlimited liability iv. Hard to transfer ownership from one person to another v. More people making decisions so decision making process becomes difficult 3. Partnership can be general or limited. A general partnership income is more open. In a limited partnership, the limited partner’s amount of income is affected. In limited partnerships, certain
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This note was uploaded on 10/17/2011 for the course FINC 302 taught by Professor Lawrence during the Spring '11 term at Nicholls State.

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Chapter 1 Test 1 - Chapter 1 Finance 302 Test#1 Outline What is the goal of the firm and why Why are other goals not adequate Managements goal

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