HFt 4464 Exam 1 With Complete Solution

HFt 4464 Exam 1 With
Complete Solution

The share holders of a corporation have unlimited liability - ANSWER False

Preferred stock is a security that has the features of both debt and equity -
ANSWER False

The goal of hospitality financial management is to maximize the wealth of
the owners. - ANSWER True

The value of dividends is not affected by the date the are received. - ANSWER
False

A good example of an agency relationship in a hotel is the relationship
between a bartender and a server. - ANSWER False

Financial management is the process of classifying financial information. -
ANSWER False

The earnings of a firm are not equivalent to its cash flows. - ANSWER True

The three major decision in financial management involve investing,
financing, and the payment of dividends. - ANSWER True

Financial management cannot be related to other functional areas of
management such as marketing. - ANSWER False

The most common form of business organization in the United States is the
sole proprietorship. - ANSWER True

, Sole Proprietorship - ANSWER Advantages:

Easy to form, greater control, and single taxation.

Disadvantages:

Unlimited Liability and difficulty raising capital




Partnership - ANSWER Advantages:

Easy to form, greater control, and single taxation.

Disadvantages:

Unlimited liability and difficulty raising capital




Limited Liability partnership - ANSWER Advantages:

Easy to form, limited liability, and single taxation.

Disadvantages:

Difficult to raise capital and short lifetime




Corporation - ANSWER Advantages:

Unlimited Life, limited liability, easy to raise capital.

Disadvantages:

Hard to form, increased regulation, double taxation (taxed on both corporate
and personal level)