MBA 702 - Exam 1
Questions and
Complete Solutions
Graded A+
Denning [Date] [Course title]
, Captial Budgeting - Answer: What long-term investments should you take on? What lines of business
will you be in and what sorts of buildings, machinery, and equipment will you need?
Capital Structure - Answer: Where will you get the long-term financing to pay for your investment? Will
you bring in other owners or will you borrow the money?
Working Capital Management - Answer: How will you manage your everyday financial activities such as
collecting from customers and paying suppliers?
Treasurer - Answer: Oversees cash management, credit management, capital expenditures, and
financial planning
Controller - Answer: Oversees taxes, cost accounting, financial accounting and data processing
Three major forms os business organization in the United States - Answer: Sole Proprietorship,
Partnership, Corporation
Sole Proprietorship - Answer: A business owned by one person. This is the simplest type of business to
start. It is the least regulated form of organization. There is no distinction between personal and
business income, so all business income is taxed as personal income.
Partnership - Answer: A business with two or more owners. In a general partnership, all the partners
share in gains or losses, and all have unlimited liability for all debts. In a limited partnership, one or more
general partners will run the business and have unlimited liability, but there will also be one or more
limited partners who do not actively participate in the business
Corporation - Answer: A legal "person" separate and distinct rom its owners. Can borrow money and
own property, can sue and be sued, and can enter into contracts. Most important form in terms of size.
Advantages of Sole Proprietorship - Answer: Easiest to start
Least regulated
Single owner keeps all the profits
Taxed once as personal income
Questions and
Complete Solutions
Graded A+
Denning [Date] [Course title]
, Captial Budgeting - Answer: What long-term investments should you take on? What lines of business
will you be in and what sorts of buildings, machinery, and equipment will you need?
Capital Structure - Answer: Where will you get the long-term financing to pay for your investment? Will
you bring in other owners or will you borrow the money?
Working Capital Management - Answer: How will you manage your everyday financial activities such as
collecting from customers and paying suppliers?
Treasurer - Answer: Oversees cash management, credit management, capital expenditures, and
financial planning
Controller - Answer: Oversees taxes, cost accounting, financial accounting and data processing
Three major forms os business organization in the United States - Answer: Sole Proprietorship,
Partnership, Corporation
Sole Proprietorship - Answer: A business owned by one person. This is the simplest type of business to
start. It is the least regulated form of organization. There is no distinction between personal and
business income, so all business income is taxed as personal income.
Partnership - Answer: A business with two or more owners. In a general partnership, all the partners
share in gains or losses, and all have unlimited liability for all debts. In a limited partnership, one or more
general partners will run the business and have unlimited liability, but there will also be one or more
limited partners who do not actively participate in the business
Corporation - Answer: A legal "person" separate and distinct rom its owners. Can borrow money and
own property, can sue and be sued, and can enter into contracts. Most important form in terms of size.
Advantages of Sole Proprietorship - Answer: Easiest to start
Least regulated
Single owner keeps all the profits
Taxed once as personal income
