mgmt 310 exam 1 example problems || SOLVED 100%
CORRECT!!
Which one of the following questions is a working capital management decision?
Multiple Choice:
Should the company issue new shares of stock or borrow money?
Should the company refurbish its equipment or replace it?
How much inventory should the company keep on hand?
Should the company close one of its current stores? correct answers How much inventory
should the company keep on hand?
Deciding which long-term investment a firm should make is a ______ decision.
Multiple Choice:
working capital management
capital constraints
cost of capital
capital budgeting
capital structure correct answers capital budgeting
A firm owned by a single person who has unlimited liability for the firm's debt is called a:
Multiple Choice:
corporation.
sole proprietorship.
general partnership.
limited partnership.
limited liability company. correct answers sole proprietorship.
A business that is a legal entity separate from the owners, yet treated as a legal person, is
called a(n):
Multiple Choice
corporation.
,sole proprietorship.
general partnership.
limited partnership.
unlimited liability company. correct answers corporation
A sole proprietorship:
Multiple Choice:
is designed to protect the personal assets of the owner.
may earn profits that are subject to double taxation.
requires the owner to be personally responsible for all of the company's debts.
is the least represented type of firm in the U.S. today.
provides the same benefits to owners that a limited liability company does. correct answers
requires the owner to be personally responsible for all of the company's debts.
A sole proprietorship:
Multiple Choice
has a limited life.
can generally raise large sums of capital quite easily.
can transfer ownership of the firm more easily than a corporation can.
is taxed the same as a C corporation.
is the most regulated form of organization. correct answers has a limited life
A general partner:
Multiple Choice
is personally responsible for 100 percent of the debts of the partnership.
is responsible for 80 percent of the firm's debts if he or she owns 80 percent of the
partnership.
faces double taxation whereas a limited partner does not.
has a maximum loss equal to his or her equity investment.
receives a salary in lieu of a portion of the profits. correct answers is personally responsible
for 100 percent of the debts of the partnership.
, Which one of the following statements regarding corporations is correct?
Multiple Choice
The majority of firms in the U.S. are structured as corporations.
Undistributed corporate profits are taxable income to the shareholders.
Corporations can have an unlimited life.
Shareholders are protected from all potential losses.
Shareholders directly elect the chief financial officer. correct answers Corporations can have
an unlimited life.
Marissa and Raj are equal general partners in a business. They are content with their current
management and tax situation but are uncomfortable with the idea of unlimited liability. If
they wish to remain as the only two owners of the business, which form of business entity
should they consider to replace their current arrangement?
Multiple Choice:
Sole proprietorship
Joint stock company
Limited partnership
Limited liability company
Corporation correct answers Limited liability company
Which one of the following best illustrates that the management of a firm is adhering to the
goal of financial management?
Multiple Choice:
An increase in the amount of the quarterly dividend
A decrease in the per unit production costs
An increase in the number of shares outstanding
A decrease in the net working capital
An increase in the market value per share correct answers An increase in the market value per
share
Ultimately, the ______ control(s) the corporation.
CORRECT!!
Which one of the following questions is a working capital management decision?
Multiple Choice:
Should the company issue new shares of stock or borrow money?
Should the company refurbish its equipment or replace it?
How much inventory should the company keep on hand?
Should the company close one of its current stores? correct answers How much inventory
should the company keep on hand?
Deciding which long-term investment a firm should make is a ______ decision.
Multiple Choice:
working capital management
capital constraints
cost of capital
capital budgeting
capital structure correct answers capital budgeting
A firm owned by a single person who has unlimited liability for the firm's debt is called a:
Multiple Choice:
corporation.
sole proprietorship.
general partnership.
limited partnership.
limited liability company. correct answers sole proprietorship.
A business that is a legal entity separate from the owners, yet treated as a legal person, is
called a(n):
Multiple Choice
corporation.
,sole proprietorship.
general partnership.
limited partnership.
unlimited liability company. correct answers corporation
A sole proprietorship:
Multiple Choice:
is designed to protect the personal assets of the owner.
may earn profits that are subject to double taxation.
requires the owner to be personally responsible for all of the company's debts.
is the least represented type of firm in the U.S. today.
provides the same benefits to owners that a limited liability company does. correct answers
requires the owner to be personally responsible for all of the company's debts.
A sole proprietorship:
Multiple Choice
has a limited life.
can generally raise large sums of capital quite easily.
can transfer ownership of the firm more easily than a corporation can.
is taxed the same as a C corporation.
is the most regulated form of organization. correct answers has a limited life
A general partner:
Multiple Choice
is personally responsible for 100 percent of the debts of the partnership.
is responsible for 80 percent of the firm's debts if he or she owns 80 percent of the
partnership.
faces double taxation whereas a limited partner does not.
has a maximum loss equal to his or her equity investment.
receives a salary in lieu of a portion of the profits. correct answers is personally responsible
for 100 percent of the debts of the partnership.
, Which one of the following statements regarding corporations is correct?
Multiple Choice
The majority of firms in the U.S. are structured as corporations.
Undistributed corporate profits are taxable income to the shareholders.
Corporations can have an unlimited life.
Shareholders are protected from all potential losses.
Shareholders directly elect the chief financial officer. correct answers Corporations can have
an unlimited life.
Marissa and Raj are equal general partners in a business. They are content with their current
management and tax situation but are uncomfortable with the idea of unlimited liability. If
they wish to remain as the only two owners of the business, which form of business entity
should they consider to replace their current arrangement?
Multiple Choice:
Sole proprietorship
Joint stock company
Limited partnership
Limited liability company
Corporation correct answers Limited liability company
Which one of the following best illustrates that the management of a firm is adhering to the
goal of financial management?
Multiple Choice:
An increase in the amount of the quarterly dividend
A decrease in the per unit production costs
An increase in the number of shares outstanding
A decrease in the net working capital
An increase in the market value per share correct answers An increase in the market value per
share
Ultimately, the ______ control(s) the corporation.
