Courseweb MIDTERM Answer Key

Courseweb MIDTERM Answer Key - FALL 2011 ENGR 111 MIDTERM...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
FALL 2011 ENGR 111- MIDTERM ANSWER KEY Multiple Choice Questions : (Each 2 points) 1. The process of planning and managing a firm's long-term investments is called: A. working capital management. B. financial depreciation. C. agency cost analysis. D. capital budgeting. E. capital structure. 2. A business owned by a single individual is called a: A. corporation. B. sole proprietorship. C. general partnership. D. limited partnership. E. limited liability company. 3. The three parts of the Du Pont identity can be generally described as: I. operating efficiency, asset use efficiency and firm profitability. II. financial leverage, operating efficiency and asset use efficiency. III. the equity multiplier, the profit margin and the total asset turnover. IV. the debt-equity ratio, the capital intensity ratio and the profit margin. A. I and II only B. II and III only C. I and IV only D. I and III only E. III and IV only 4. Which one of the following statements is correct? A. Both partnerships and corporations incur double taxation. B. Both sole proprietorships and partnerships are taxed in a similar fashion. C. Partnerships are the most complicated type of business to form. D. Both partnerships and corporations have limited liability for general partners and shareholders. E. All types of business formations have limited lives. 5. The decisions made by financial managers should all be ones which increase the: A. size of the firm. B. growth rate of the firm. C. marketability of the managers. D. market value of the existing owners' equity. E. financial distress of the firm.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
6. A stakeholder is: A. any person or entity that owns shares of stock of a corporation. B. any person or entity that has voting rights based on stock ownership of a corporation. C. a person who initially started a firm and currently has management control over the cash flows of the firm due to his/her current ownership of company stock. D. a creditor to whom the firm currently owes money and who consequently has a claim on the cash flows of the firm. E. any person or entity other than a stockholder or creditor who potentially has a claim on the cash flows of the firm. 7. In 1990s several Microsoft stakeholders sued the company because: A. Microsoft’s profit margin was too high compared to the other firms in the industry. B. Microsoft’s leverage was too high compared to the other firms in the industry. C. As the single buyer of a raw material, Microsoft exercised monopsony power. D. As a monopoly, Microsoft abused its position and reduced the competitiveness in the industry. E. Microsoft did not pay any dividends to its stockholders. 8. A(n) ____ asset is one which can be quickly converted into cash without significant loss in value. A.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/05/2011 for the course ENGINEERIN 111 taught by Professor Melihabulu-taciroglu during the Fall '11 term at UCLA.

Page1 / 10

Courseweb MIDTERM Answer Key - FALL 2011 ENGR 111 MIDTERM...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online