Physiology Exam 2 Ch. 6 Test Bank
Questions and Answers
The primary goal of the financial manager of a firm should be to - Answer-A.
maximize the firm's net income.
B. maximize the dividends paid to stockhloders.
Your Answer C. maximize stockholder wealth (stock price).
D. minimize the expenses incurred by the firm.
E. minimize interest payments on the firm's debt
The three primary forms of business organizations described in the book are -
Answer-Your Answer A. proprietorship, partnership, and corporation.
B. partnership, business association, and corporation.
C. multinational limited corporation, proprietorship, and partnership.
D. corporation, limited association, and multinational limited corporation.
Large foreign firms generally have _________ stockholders than U.S. firms that are
the same size. - Answer-A. more
Your Answer B. fewer
C. about the same number of
D. Foreign firms do not have stockholders.
________ exist when managers make decisions that are in their own best interests
rather than the best interests of the owners of a firm. - Answer-A. Illegal trades
B. Takeover difficulties
C. Separation issues
D. Goal anxieties
Your Answer E. Agency problems
According to the text, which of the following well-known companies is a member of
an industrial group that would be called a chaebol? - Answer-Correct Answer A.
Hyundai
Your Answer B. Toyota
, C. Mitsubishi
D. Toshiba
E. General Motors
Which of the following financial statements includes information about a firm's assets
(investments) and how those assets are financed? - Answer-Your Answer A.
Balance sheet
B. Income statement
C. Statement of retained earnings
D. Statement of cash flows
_______ techniques are employed by firms that attempt to make their financial
statements look better than they actually are. - Answer-A. Conservative accounting
B. Illegal accounting
C. Smoke-and-mirror accounting
Your Answer D. Window dressing
E. Rationally adjusted incomev
When conducting financial statement analysis, it is important that a firm complete
two principal types of analyses, which are called ______ analysis and ______
analysis. - Answer-A. DuPont ratio; trend
B. industry; comparative ratio
Your Answer C. comparative ratio; trend
D. Balance sheet; retained earnings
Which of the following would NOT be classified as a profitability ratio - Answer-Your
Answer A. time-interest-earned (TIE) ratio
B. net profit margin
C. return on total assets (ROA)
D. return on common equity (ROE)
Which of the following groups of financial ratios provides an indication as to how well
the firm can meet its current (short-term) financial obligations (debt)? - Answer-A.
market value ratios
B. asset management ratios
Questions and Answers
The primary goal of the financial manager of a firm should be to - Answer-A.
maximize the firm's net income.
B. maximize the dividends paid to stockhloders.
Your Answer C. maximize stockholder wealth (stock price).
D. minimize the expenses incurred by the firm.
E. minimize interest payments on the firm's debt
The three primary forms of business organizations described in the book are -
Answer-Your Answer A. proprietorship, partnership, and corporation.
B. partnership, business association, and corporation.
C. multinational limited corporation, proprietorship, and partnership.
D. corporation, limited association, and multinational limited corporation.
Large foreign firms generally have _________ stockholders than U.S. firms that are
the same size. - Answer-A. more
Your Answer B. fewer
C. about the same number of
D. Foreign firms do not have stockholders.
________ exist when managers make decisions that are in their own best interests
rather than the best interests of the owners of a firm. - Answer-A. Illegal trades
B. Takeover difficulties
C. Separation issues
D. Goal anxieties
Your Answer E. Agency problems
According to the text, which of the following well-known companies is a member of
an industrial group that would be called a chaebol? - Answer-Correct Answer A.
Hyundai
Your Answer B. Toyota
, C. Mitsubishi
D. Toshiba
E. General Motors
Which of the following financial statements includes information about a firm's assets
(investments) and how those assets are financed? - Answer-Your Answer A.
Balance sheet
B. Income statement
C. Statement of retained earnings
D. Statement of cash flows
_______ techniques are employed by firms that attempt to make their financial
statements look better than they actually are. - Answer-A. Conservative accounting
B. Illegal accounting
C. Smoke-and-mirror accounting
Your Answer D. Window dressing
E. Rationally adjusted incomev
When conducting financial statement analysis, it is important that a firm complete
two principal types of analyses, which are called ______ analysis and ______
analysis. - Answer-A. DuPont ratio; trend
B. industry; comparative ratio
Your Answer C. comparative ratio; trend
D. Balance sheet; retained earnings
Which of the following would NOT be classified as a profitability ratio - Answer-Your
Answer A. time-interest-earned (TIE) ratio
B. net profit margin
C. return on total assets (ROA)
D. return on common equity (ROE)
Which of the following groups of financial ratios provides an indication as to how well
the firm can meet its current (short-term) financial obligations (debt)? - Answer-A.
market value ratios
B. asset management ratios
