Finance 300 ( CSULB Yulong Ma) Exam 1 Chpt 1, 4,
5 Questions With 100% Verified Solutions
Why Study Finance? - ANSWER -Analyzing costs and benefits of projects of all
types is one of the most important aspects of finance, so the tools you learn in
finance are vital in marketing research, the design of marketing and distribution
channels, and product pricing. Understanding of how their jobs affect profitability,
and they are also expected to be able to work within their areas to improve
profitability. you will have to make financial decisions that will be very important
to you personally.
Capital Budgeting - ANSWER -the process of planning and managing a firm's
long-term investments.
Into what category of financial management does cash management fall? -
ANSWER -Working Capital Management: assets - current liabilities. The term
working capital refers to a firm's short-term assets, such as inventory, and its short-
term liabilities, such as money owed to suppliers.
Managing the firm's working capital is a day-to-day activity that ensures the firm
has sufficient resources to continue its operations and avoid costly interruptions.
This involves a number of activities related to the firm's receipt and disbursement
of cash.
What is the capital budgeting decision? - ANSWER -In capital budgeting, the
financial manager tries to identify investment opportunities that are worth more to
the firm than they cost to acquire. Loosely speaking, this means that the value of
the cash flow generated by an asset exceeds the cost of that asset.
What do you call the specific mixture of long-term debt and equity that a firm
chooses to use? - ANSWER -Capital Structure: The financial manager has two
concerns in this area. First: How much should the firm borrow? Second: What are
the least expensive sources of funds for the firm?
sole proprietorship - ANSWER -a business owned by one person. This is the
simplest type of business to start and is the least regulated form of organization.
For this reason, there are more proprietorships than any other type of business, and
, many businesses that later become large corporations start out as small
proprietorships.
Partnership* - ANSWER -A business in which two or more persons combine their
assets and skills. Partners share in gains or losses, and all have unlimited liability
for all partnership debts, not just some particular share. The way partnership gains
(and losses) are divided is described in the partnership agreement. This agreement
can be an informal oral agreement, such as "let's start a lawn mowing business," or
a lengthy, formal written document.
Disadvantages of sole proprietorships - ANSWER -(1) unlimited liability for
business debts on the part of the owners
(2) limited life of the business, and
(3) difficulty of transferring ownership.
Corporation* - ANSWER -A business created as a distinct legal entity owned by
one or more individuals or entities. Most important form (in terms of size) of
business organization in the United States. A corporation is a legal "person"
separate and distinct from its owners, and it has many of the rights, duties, and
privileges of an actual person. Corporations can borrow money and own property,
can sue and be sued, and can enter into contracts.
General Partneship - ANSWER -is similar to a proprietorship, except that there
are two or more owners (partners). In a general partnership, all the partners share
in gains or losses, and all have unlimited liability for all partnership debts, not just
some particular share. The way partnership gains (and losses) are divided is
described in the partnership agreement. This agreement can be an informal oral
agreement, such as "let's start a lawn mowing business," or a lengthy, formal
written document.
Limited Partnership - ANSWER -one or more general partners will run the
business and have unlimited liability, but there will be one or more limited partners
who do not actively participate in the business. A limited partner's liability for
business debts is limited to the amount that partner contributes to the partnership.
This form of organization is common in real estate ventures
Why is the corporate form superior when it comes to raising cash? - ANSWER -
Ownership (represented by shares of stock) can be readily transferred, and the life
of the corporation is, therefore, not limited. The corporation borrows money in its
5 Questions With 100% Verified Solutions
Why Study Finance? - ANSWER -Analyzing costs and benefits of projects of all
types is one of the most important aspects of finance, so the tools you learn in
finance are vital in marketing research, the design of marketing and distribution
channels, and product pricing. Understanding of how their jobs affect profitability,
and they are also expected to be able to work within their areas to improve
profitability. you will have to make financial decisions that will be very important
to you personally.
Capital Budgeting - ANSWER -the process of planning and managing a firm's
long-term investments.
Into what category of financial management does cash management fall? -
ANSWER -Working Capital Management: assets - current liabilities. The term
working capital refers to a firm's short-term assets, such as inventory, and its short-
term liabilities, such as money owed to suppliers.
Managing the firm's working capital is a day-to-day activity that ensures the firm
has sufficient resources to continue its operations and avoid costly interruptions.
This involves a number of activities related to the firm's receipt and disbursement
of cash.
What is the capital budgeting decision? - ANSWER -In capital budgeting, the
financial manager tries to identify investment opportunities that are worth more to
the firm than they cost to acquire. Loosely speaking, this means that the value of
the cash flow generated by an asset exceeds the cost of that asset.
What do you call the specific mixture of long-term debt and equity that a firm
chooses to use? - ANSWER -Capital Structure: The financial manager has two
concerns in this area. First: How much should the firm borrow? Second: What are
the least expensive sources of funds for the firm?
sole proprietorship - ANSWER -a business owned by one person. This is the
simplest type of business to start and is the least regulated form of organization.
For this reason, there are more proprietorships than any other type of business, and
, many businesses that later become large corporations start out as small
proprietorships.
Partnership* - ANSWER -A business in which two or more persons combine their
assets and skills. Partners share in gains or losses, and all have unlimited liability
for all partnership debts, not just some particular share. The way partnership gains
(and losses) are divided is described in the partnership agreement. This agreement
can be an informal oral agreement, such as "let's start a lawn mowing business," or
a lengthy, formal written document.
Disadvantages of sole proprietorships - ANSWER -(1) unlimited liability for
business debts on the part of the owners
(2) limited life of the business, and
(3) difficulty of transferring ownership.
Corporation* - ANSWER -A business created as a distinct legal entity owned by
one or more individuals or entities. Most important form (in terms of size) of
business organization in the United States. A corporation is a legal "person"
separate and distinct from its owners, and it has many of the rights, duties, and
privileges of an actual person. Corporations can borrow money and own property,
can sue and be sued, and can enter into contracts.
General Partneship - ANSWER -is similar to a proprietorship, except that there
are two or more owners (partners). In a general partnership, all the partners share
in gains or losses, and all have unlimited liability for all partnership debts, not just
some particular share. The way partnership gains (and losses) are divided is
described in the partnership agreement. This agreement can be an informal oral
agreement, such as "let's start a lawn mowing business," or a lengthy, formal
written document.
Limited Partnership - ANSWER -one or more general partners will run the
business and have unlimited liability, but there will be one or more limited partners
who do not actively participate in the business. A limited partner's liability for
business debts is limited to the amount that partner contributes to the partnership.
This form of organization is common in real estate ventures
Why is the corporate form superior when it comes to raising cash? - ANSWER -
Ownership (represented by shares of stock) can be readily transferred, and the life
of the corporation is, therefore, not limited. The corporation borrows money in its
