Pearson Assignment 1
Finance is... - -the art and science of managing money
-A sol proprietor has unlimited liability; his or her total investment in the business, but not his
or her personal assets, can be taken to satisfy creditors (T/F) - -False
-Capital expenditures analyst/manager is responsible for the evaluation and recommendation of
proposed asset investments (T/F) - -True
-In partnerships, owners have unlimited liability and may have to cover debts of other
financially sound partners (T/F) - -True
-A major weakness of a partnership is - -the difficulty in liquidating or transferring ownership
-Wealth of corporate owners is measured by the share price of the stock (T/F) - -True
-Stockholders expect to earn higher rates of return on investments with lower risk and lower
rates of return on investments with high risk (T/F) - -False
, -Wealth maximization as the goal of a firm implies enhancing the wealth of ... - -the firms
stockholders
-The key variables in owner wealth maximization process are... - -cash flows and risk
-As the risk of stock investment increases, investors' - -required rate or return will increase
-An accountant's primary function is... - -collecting and presenting financial data
-The primary economic principle used in managerial finance is... - -marginal cost - benefit
analysis
-Although the fir paid in full for the merchandise during the year, it is yet to collect at year end
from customer. The possible problem this firm may face is... - -lack of cash flow
-Investment decisions generally refer to the items that appear on the... - -left - hand side of the
balance sheet, and financing decisions relate to the items on the right - hand side
-The BOD is responsible for managing day to day operation and carrying out the policies
established by the chief executive officer (T/F) - -False
Finance is... - -the art and science of managing money
-A sol proprietor has unlimited liability; his or her total investment in the business, but not his
or her personal assets, can be taken to satisfy creditors (T/F) - -False
-Capital expenditures analyst/manager is responsible for the evaluation and recommendation of
proposed asset investments (T/F) - -True
-In partnerships, owners have unlimited liability and may have to cover debts of other
financially sound partners (T/F) - -True
-A major weakness of a partnership is - -the difficulty in liquidating or transferring ownership
-Wealth of corporate owners is measured by the share price of the stock (T/F) - -True
-Stockholders expect to earn higher rates of return on investments with lower risk and lower
rates of return on investments with high risk (T/F) - -False
, -Wealth maximization as the goal of a firm implies enhancing the wealth of ... - -the firms
stockholders
-The key variables in owner wealth maximization process are... - -cash flows and risk
-As the risk of stock investment increases, investors' - -required rate or return will increase
-An accountant's primary function is... - -collecting and presenting financial data
-The primary economic principle used in managerial finance is... - -marginal cost - benefit
analysis
-Although the fir paid in full for the merchandise during the year, it is yet to collect at year end
from customer. The possible problem this firm may face is... - -lack of cash flow
-Investment decisions generally refer to the items that appear on the... - -left - hand side of the
balance sheet, and financing decisions relate to the items on the right - hand side
-The BOD is responsible for managing day to day operation and carrying out the policies
established by the chief executive officer (T/F) - -False
