Test bank for Gapenski's Unde
Financial Management, 7th sev
Pink Test ba
,1. ch01-001
Financial management provides the theories, concepts, and tools necessary to help managers make
better financial decisions.
*a. True
b. False
2. ch01-002
Which of following factors make the health services industry unique (different from other industries)?
a. It has many not-for-profit organizations.
b. Most revenues do not come from the beneficiary of the services.
c. The government is highly involved.
d. Answers a. and b. are both correct.
*e. Answers a., b., and c. are all correct.
3. ch01-003
Which of the following is not a finance activity?
a. Evaluation and planning
b. Financing decisions
c. Long-term investment decisions
d. Financial risk management
*e. Facilities management
,4. ch01-004
Which of the following statements about organizational goals is most correct?
a. In proprietorships and partnerships, the owners? goals and the business?s goals are completely
separate.
b. The primary goal of investor-owned corporations is to increase the size of the organization.
c. The primary goal of not-for-profit corporations is to increase the size of the organization.
*d. The primary goal of investor-owned corporations is shareholder wealth (stock price)
maximization.
e. Because not-for-profit corporations have a charitable purpose, they typically do not establish an
organizational goal.
5. ch01-005
Because for-profit and not-for-profit organizations have different financial goals, the finance function
is totally different between these two forms of ownership.
a. True
*b. False
6. ch01-006
Which of the following statements about organizational stakeholders is most correct?
*a. All businesses have stakeholders.
, b. Only for-profit businesses have stakeholders.
c. Only not-for-businesses have stakeholders.
d. Not-for-profit and for-profit businesses each have stakeholders, but they are completely different
parties.
e. In for-profit businesses, the only stakeholders are owners.
7. ch01-007
Which of the following statements about the agency problem is most correct?
a. The problem only occurs at not-for-profit corporations.
*b. The problem can be reduced by creating proper managerial incentives.
c. The problem can be reduced by giving managers long-term contracts.
d. Answers a. and b. are both correct.
e. Answers a., b., and c. are all correct.
8. ch01-008
Which of the following statements about the legal forms of for-profit business organization is most
correct?
a. Corporations are easier to form than are proprietorships.
b. Partnerships are applicable when there are more the three owners, while proprietorships are used
when there are three or less owners.
*c. Corporations have the advantage of limited liability to owners.
d. Hybrid forms of business cannot be used by healthcare organizations.
e. With corporations, income is taxed only once and hence they typically are more tax efficient than
Financial Management, 7th sev
Pink Test ba
,1. ch01-001
Financial management provides the theories, concepts, and tools necessary to help managers make
better financial decisions.
*a. True
b. False
2. ch01-002
Which of following factors make the health services industry unique (different from other industries)?
a. It has many not-for-profit organizations.
b. Most revenues do not come from the beneficiary of the services.
c. The government is highly involved.
d. Answers a. and b. are both correct.
*e. Answers a., b., and c. are all correct.
3. ch01-003
Which of the following is not a finance activity?
a. Evaluation and planning
b. Financing decisions
c. Long-term investment decisions
d. Financial risk management
*e. Facilities management
,4. ch01-004
Which of the following statements about organizational goals is most correct?
a. In proprietorships and partnerships, the owners? goals and the business?s goals are completely
separate.
b. The primary goal of investor-owned corporations is to increase the size of the organization.
c. The primary goal of not-for-profit corporations is to increase the size of the organization.
*d. The primary goal of investor-owned corporations is shareholder wealth (stock price)
maximization.
e. Because not-for-profit corporations have a charitable purpose, they typically do not establish an
organizational goal.
5. ch01-005
Because for-profit and not-for-profit organizations have different financial goals, the finance function
is totally different between these two forms of ownership.
a. True
*b. False
6. ch01-006
Which of the following statements about organizational stakeholders is most correct?
*a. All businesses have stakeholders.
, b. Only for-profit businesses have stakeholders.
c. Only not-for-businesses have stakeholders.
d. Not-for-profit and for-profit businesses each have stakeholders, but they are completely different
parties.
e. In for-profit businesses, the only stakeholders are owners.
7. ch01-007
Which of the following statements about the agency problem is most correct?
a. The problem only occurs at not-for-profit corporations.
*b. The problem can be reduced by creating proper managerial incentives.
c. The problem can be reduced by giving managers long-term contracts.
d. Answers a. and b. are both correct.
e. Answers a., b., and c. are all correct.
8. ch01-008
Which of the following statements about the legal forms of for-profit business organization is most
correct?
a. Corporations are easier to form than are proprietorships.
b. Partnerships are applicable when there are more the three owners, while proprietorships are used
when there are three or less owners.
*c. Corporations have the advantage of limited liability to owners.
d. Hybrid forms of business cannot be used by healthcare organizations.
e. With corporations, income is taxed only once and hence they typically are more tax efficient than
