Foundations of Finance Chapter 1 Guide Questions with answers

Foundations of Finance Chapter 1 Guide Questions with answers incremental cash flow - correct answersthe difference between the cash flows a company will produce both with and without the investment it is thinking about making opportunity cost - correct answersthe next best alternative available to the decision maker for a given level of risk efficient market - correct answersa market in which the prices of securities at any instant in time fully reflect all the publicly available information about the securities and their actual public valuse agency problem - correct answersproblems and conflicts resulting from the separation of the management and ownership of the firm capital budgeting - correct answersthe decision-making process with respect to investment in fixed assets capital structure decision - correct answersthe decision-making process with funding choices and the mix of long-term sources of funds working capital management - correct answersthe management of the firm's current assets and short-term financing financial markets - correct answersthose institutions and procedures that facilitate transactions in all types of financial claims sole proprietorship - correct answersa business owned by a single individual partnership - correct answersan association of two or more individuals joining together as co-owners to operate a business for profit general partnership - correct answersa partnership in which all partners are fully liable for the indebtedness incurred by the partnership