FIN 300 Quiz Questions Exam 1 || Get it Correct.
Which of the following areas of finance is concerned with internal decision-making of a
business?
Financial markets and institutions
Financial Management
Investments
Agency Issues correct answers Financial Management
The term "financial management" refers to:
The variety of job titles often given to financial managers.
The duties of the one person who makes most of the financial decisions.
The process of decision-making that produces value.
The chief financial officer (CFO). correct answers The process of decision-making that produces
value.
"The primary financial goal of the business firm is to maximize the wealth of the firm's owners."
For a corporation, this statement means that managers should focus on maximizing the wealth of
its shareholders or its:
market value
sales revenue
net income
minimize the risk correct answers market value
Which of the following is associated with increasing the value of a business?
Increasing cash inflows
Decreasing the time when cash inflows occur
,Decreasing the riskiness of future cash inflows
All of the above correct answers Increasing cash inflows
Decreasing the time when cash inflows occur
Decreasing the riskiness of future cash inflows
Correct!
All of the above
The expenses involved to monitor managers and their actions is called:
interest expense
agency costs
stock options
stakeholder costs correct answers agency costs
Which corporate stakeholder group, if served, will also assure that the corporation will serve
most other stakeholders?
Lenders or creditors
Employees
Senior managers
Shareholders correct answers Shareholders
The corporate form of business organization dominates today because:
The corporation is a legal entity with a long or permanent life and limited liability for
shareholders.
The ease of starting the corporation
Owners pay less taxes with the corporate form of organization
, The shareholders have unlimited liability for the obligations incurred by the corporation correct
answers The corporation is a legal entity with a long or permanent life and limited liability for
shareholders.
The functions of the financial manager includes:
Decisions associated with new products or service investments
Decisions related to the mix of debt and equity financing
Estimating the financial expectations of the shareholders
All of the above. correct answers All of the above
Using value maximization as the basis for making business decisions means that financial
managers should consider all but one of the following?
The expected impact of an investment on earnings per share.
The future cash flows associated with the decision.
The timing of the future cash flows associated with the investment
The riskiness or variability of future cash flows associated with the investment. correct answers
The expected impact of an investment on earnings per share.
Cash flows may differ compared to revenue from sales when:
The customer pays cash for the item purchased.
The customer receives sixty days credit for goods purchased.
The restaurant pays for its produce with cash.
The cash accounting method is used. correct answers The customer receives sixty days credit for
goods purchased.
Profit maximization as a goal of the firm:
, Group of answer choices
is an economic principle and not an accounting one
is superior to other goals that could be pursued
maximizes the wealth of the owners
does not consider cash flow or risk correct answers does not consider cash flow or risk
Wealth maximization as a goal of the firm:
Group of answer choices
is usually discounted by bondholders
takes a long-run perspective and focuses on the owners of the firm
is a long-run perspective used by financial managers for internal use only
is an accounting number correct answers takes a long-run perspective and focuses on the owners
of the firm
An important advantage a general partner usually has is:
Group of answer choices
limited liability
usually a larger share of profit distribution when the firm is successful
unlimited liability
profits received are tax-free correct answers usually a larger share of profit distribution when the
firm is successful
Which of the following areas of finance is concerned with internal decision-making of a
business?
Financial markets and institutions
Financial Management
Investments
Agency Issues correct answers Financial Management
The term "financial management" refers to:
The variety of job titles often given to financial managers.
The duties of the one person who makes most of the financial decisions.
The process of decision-making that produces value.
The chief financial officer (CFO). correct answers The process of decision-making that produces
value.
"The primary financial goal of the business firm is to maximize the wealth of the firm's owners."
For a corporation, this statement means that managers should focus on maximizing the wealth of
its shareholders or its:
market value
sales revenue
net income
minimize the risk correct answers market value
Which of the following is associated with increasing the value of a business?
Increasing cash inflows
Decreasing the time when cash inflows occur
,Decreasing the riskiness of future cash inflows
All of the above correct answers Increasing cash inflows
Decreasing the time when cash inflows occur
Decreasing the riskiness of future cash inflows
Correct!
All of the above
The expenses involved to monitor managers and their actions is called:
interest expense
agency costs
stock options
stakeholder costs correct answers agency costs
Which corporate stakeholder group, if served, will also assure that the corporation will serve
most other stakeholders?
Lenders or creditors
Employees
Senior managers
Shareholders correct answers Shareholders
The corporate form of business organization dominates today because:
The corporation is a legal entity with a long or permanent life and limited liability for
shareholders.
The ease of starting the corporation
Owners pay less taxes with the corporate form of organization
, The shareholders have unlimited liability for the obligations incurred by the corporation correct
answers The corporation is a legal entity with a long or permanent life and limited liability for
shareholders.
The functions of the financial manager includes:
Decisions associated with new products or service investments
Decisions related to the mix of debt and equity financing
Estimating the financial expectations of the shareholders
All of the above. correct answers All of the above
Using value maximization as the basis for making business decisions means that financial
managers should consider all but one of the following?
The expected impact of an investment on earnings per share.
The future cash flows associated with the decision.
The timing of the future cash flows associated with the investment
The riskiness or variability of future cash flows associated with the investment. correct answers
The expected impact of an investment on earnings per share.
Cash flows may differ compared to revenue from sales when:
The customer pays cash for the item purchased.
The customer receives sixty days credit for goods purchased.
The restaurant pays for its produce with cash.
The cash accounting method is used. correct answers The customer receives sixty days credit for
goods purchased.
Profit maximization as a goal of the firm:
, Group of answer choices
is an economic principle and not an accounting one
is superior to other goals that could be pursued
maximizes the wealth of the owners
does not consider cash flow or risk correct answers does not consider cash flow or risk
Wealth maximization as a goal of the firm:
Group of answer choices
is usually discounted by bondholders
takes a long-run perspective and focuses on the owners of the firm
is a long-run perspective used by financial managers for internal use only
is an accounting number correct answers takes a long-run perspective and focuses on the owners
of the firm
An important advantage a general partner usually has is:
Group of answer choices
limited liability
usually a larger share of profit distribution when the firm is successful
unlimited liability
profits received are tax-free correct answers usually a larger share of profit distribution when the
firm is successful
