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Test 1Questions
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Corporate
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Test 1Questions
for Principles
and of
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Corporate
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Test 1Questions
for Principles
and of
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Corporate
Study
Finance
Guide.pdf
Test Bank Complete Questions and Answers Study Guide.pdf
,Test 1 For Principles of Corporate Finance.pdf Test 1 For Principles of Corporate Finance.pdf Test 1 For Principles of Corporate Finance.pdf
Terms in this set (164)
What does the Vice President of Finance coordinate The activities of the treasurer and the controller
What does the controller's office do? They handle cost and financial accounting, tax payments, and management
information systems
What is the treasurer's office responsible for? Managing the firm's cash and credit, it's financial planning, and its capital
expenditures.
Capital Budgeting The process of planning and managing a firm's long-term investment.
Cash flow generated be an asset ________________ the cost of exceeds
that asset
Capital structure (finanical structure) the specific mixture of long-term debt and equity the firm uses to finance its
operation.
Working Capital a firm's short-term assets, such as inventory, and its short-term liabilities, such as
money owed to suppliers.
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Sole proprietorship a business owned by one person; the simplest type of business to start and is the
least regulated form of organization; limited to the owner's life span' the amount
of equity that can be raised is limited to the proprietor's personal wealth; unable
to exploit new opportunities because of insufficient capital; difficult to sell.
unlimited liability The owner is personally and fully responsible for all losses and debts of the
business
Partnership similar to a proprietorship, except that there are two of more owners (partners)
general partnership all partners share in gains or losses, and all have unlimited liability for all
partnership debts, not just some particular share
Partnership agreement the way partnership gains and losses are divided.
limited partnership one or more general partners will run the business and have unlimited liability, but
there will be one or more limited partners who do not actively participate in the
business.
Advantages and Disadvantages of a partnership Relatively informal agreement are easy and inexpensive to form; unlimited liability
for partnership debts; all income is taxed as personal income to the partners.
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