FIN 301 - CREIGHTON UNIVERSITY - TEST ONE
QUESTIONS & VERIFIED ANSWERS PASSED
1. Capital Budgeting the process of planning and managing a firm's long-term
investments
2. Capital Structure the mix of equity and debt financing a firm uses to meet its permanent
financing
needs
3. Working Capital current assets - current liabilities
4. Sole owner keeps all profits, unlimited liability, business income taxed as
proprietor- personal
ship
5. partnership owners (2+) share all profits and losses, have unlimited liability, operate
similar
to a sole proprietorship
6. limited A partnership with one or more general partners and one or more
partner- ship
limited partners who are only responsible for debts up to what they
have invested in the business. limeted partners also do not actively
participate in the business.
7. Corporation harder to start, stockholders elect a board of directors who then choose
man-
agers, easy to transfer ownership(in this case shares of stock), most
that individ- uals in the company can lose is what they have invested
(limited liability), double taxation occurs when money is earned and
dividends are paid.
8. LLC designed to be taxed like a partnership but have limited liability as
with a corporation. Corporation/partnership hybrid.
9. Benefit corpora- tion
1/
7
, FIN 301 - CREIGHTON UNIVERSITY - TEST ONE
QUESTIONS & VERIFIED ANSWERS PASSED
10. Goal of A for-profit corporation that seeks to have a material positive impact on
financial
society and the environment. Needs: accountability, transparency,
management
purpose
maximize the current stock value
11. Agency Problem the possibility of conflict of interest between the stockholders and
management
of a firm
2/
7
QUESTIONS & VERIFIED ANSWERS PASSED
1. Capital Budgeting the process of planning and managing a firm's long-term
investments
2. Capital Structure the mix of equity and debt financing a firm uses to meet its permanent
financing
needs
3. Working Capital current assets - current liabilities
4. Sole owner keeps all profits, unlimited liability, business income taxed as
proprietor- personal
ship
5. partnership owners (2+) share all profits and losses, have unlimited liability, operate
similar
to a sole proprietorship
6. limited A partnership with one or more general partners and one or more
partner- ship
limited partners who are only responsible for debts up to what they
have invested in the business. limeted partners also do not actively
participate in the business.
7. Corporation harder to start, stockholders elect a board of directors who then choose
man-
agers, easy to transfer ownership(in this case shares of stock), most
that individ- uals in the company can lose is what they have invested
(limited liability), double taxation occurs when money is earned and
dividends are paid.
8. LLC designed to be taxed like a partnership but have limited liability as
with a corporation. Corporation/partnership hybrid.
9. Benefit corpora- tion
1/
7
, FIN 301 - CREIGHTON UNIVERSITY - TEST ONE
QUESTIONS & VERIFIED ANSWERS PASSED
10. Goal of A for-profit corporation that seeks to have a material positive impact on
financial
society and the environment. Needs: accountability, transparency,
management
purpose
maximize the current stock value
11. Agency Problem the possibility of conflict of interest between the stockholders and
management
of a firm
2/
7
