Managerial Finance Exam Questions
with Answers
Forms of Business Organization - ✔✔Sole Proprietorship
Partnership
Corporation
Partnership - ✔✔When you need more capital it becomes corporation
Corporation - ✔✔You have more opportunities to raise more money and capital
limited liability for owners
-this is great when raising money
ongoing life; even when someone dies the status of the company still lives on and doesn't falter
the ability to transfer ownership is much easier/possible
What is the difference between primary and secondary? - ✔✔Primary
-Corporation receives money and is part of the transaction
Secondary
-Customer goes through a transaction that doesn't include the corporation
, What is financial management? - ✔✔The acquisitions, management, and financing of resources
by firms
Land, cash, equipment, (etc.) things that are needed to run the business will also be included as
resources
Resources
What are the three main areas of Corporate Finance? - ✔✔Capital Budgeting
Capital Structure
Working Capital Management
Capital Budgeting - ✔✔The process of planning and managing long-term investment
Size, timing, and risk of cash flows are important when it comes decision making
Capital Structure - ✔✔The mixture of debt and equity maintained by a firm
How should we (the company) pay
-Should we use debt or equity
Leverage- Debt to equity; how much debt is related to equity
Working Capital Management - ✔✔Management of short-term assets and current liabilities
with Answers
Forms of Business Organization - ✔✔Sole Proprietorship
Partnership
Corporation
Partnership - ✔✔When you need more capital it becomes corporation
Corporation - ✔✔You have more opportunities to raise more money and capital
limited liability for owners
-this is great when raising money
ongoing life; even when someone dies the status of the company still lives on and doesn't falter
the ability to transfer ownership is much easier/possible
What is the difference between primary and secondary? - ✔✔Primary
-Corporation receives money and is part of the transaction
Secondary
-Customer goes through a transaction that doesn't include the corporation
, What is financial management? - ✔✔The acquisitions, management, and financing of resources
by firms
Land, cash, equipment, (etc.) things that are needed to run the business will also be included as
resources
Resources
What are the three main areas of Corporate Finance? - ✔✔Capital Budgeting
Capital Structure
Working Capital Management
Capital Budgeting - ✔✔The process of planning and managing long-term investment
Size, timing, and risk of cash flows are important when it comes decision making
Capital Structure - ✔✔The mixture of debt and equity maintained by a firm
How should we (the company) pay
-Should we use debt or equity
Leverage- Debt to equity; how much debt is related to equity
Working Capital Management - ✔✔Management of short-term assets and current liabilities
