FIN300: Principles of Finance for the Private Sector Module 1: Financial Management in the Corporate Environment - Mastery Exercise

FIN300: Principles of Finance for the Private Sector Module 1: Financial Management in the Corporate Environment - Mastery Exercise 1. Strengths of the _____ form of business ownership include the owner receiving all profits, low organizational costs and ease of dissolution, and having income included on the owner's personal tax return. a. holding company b. partnership c. sole proprietorship d. corporation 2. In general, most corporate capital gains are taxed at ___________ tax rate. a. a 46 percent b. the ordinary c. a 28 percent d. a 30 percent 3. Which of the following legal forms of organization is characterized by limited liability? a. sole proprietorship b. partnership c. professional partnership d. corporation 4. Which of the following legal forms of organization is most expensive to organize? a. Sole proprietorships b. Corporations c. Partnerships d. Limited partnership 5. The major securities traded in the capital markets are a. commercial paper and Treasury bills b. Treasury bills and certificates of deposit c. stocks and bonds d. bonds and commercial paper 6. The financial manager is interested in the cash inflows and outflows of the firm, rather than the accounting data, in order to ensure a. Profitability b. The ability to pay dividends c. The ability to acquire new assets d. solvency 7. Which of the following transactions may result in a capital gain for the corporation. a. A fixed asset is sold after two years of use for less than its book value. b. A fixed asset is sold after two years of use for more than the original purchase price c. A fixed asset is sold after two years of use for its book value d. inventory is sold for more than its cost 8. The goal of the firm is the maximization of: a. wealth of the firm's owners b. total assets c. sales d. earnings per share 9. The tax rate depends on the level of taxable income.  True  False This study source was downloaded by from CourseH on :33:42 GMT -06:00 10. Corporations are owned by a. employees b. chief executive officers c. stockholders d. bondholders