A+ Graded Paper
FIN 320 (SIUE) – Exam - High-Scoring Answers +
Formula Sheet
Questions and Mark scheme
Version: Final 1.1
,Basing management bonuses on the length of employment - ✔✔Which one of the following situations is most apt to
create an agency conflict?
Compensating a manager based on his or her division's net income
Giving all employees a bonus if a certain level of efficiency is maintained
Hiring an independent consultant to study the operating efficiency of the firm
Basing management bonuses on the length of employment
Laying off employees during a slack period
Establishing the preferred debt-equity level - ✔✔Which one of the following is a capital structure decision?
Determining the optimal inventory level
Establishing the preferred debt-equity level
Selecting new equipment to purchase
Setting the terms of sale for credit sales
Determining when suppliers should be paid
Any one of the partners can be held solely liable for all of the partnership's debt - ✔✔Which one of the following applies
to a general partnership?
, The firm's operations must be controlled by a single partner.
Any one of the partners can be held solely liable for all of the partnership's debt.
The profits of the firm are taxed as a separate entity.
Each partner's liability for the firm's debts is limited to each partner's investment in the firm.
The profits of a general partnership are taxed the same as those of a corporation.
Obtaining additional equity is dependent on the owner's personal finances. - ✔✔Which one of the following statements
correctly applies to a sole proprietorship?
The business entity has an unlimited life.
The ownership can easily be transferred to another individual.
The owner enjoys limited liability for the firm's debts.
Debt financing is easy to arrange in the firm's name.
Obtaining additional equity is dependent on the owner's personal finances.
Secondary market - ✔✔You contacted your stock broker this morning and placed an order to sell 300 shares of a stock
that trades on the NYSE. This sale will occur in the:
dealer market.
over-the-counter market.
FIN 320 (SIUE) – Exam - High-Scoring Answers +
Formula Sheet
Questions and Mark scheme
Version: Final 1.1
,Basing management bonuses on the length of employment - ✔✔Which one of the following situations is most apt to
create an agency conflict?
Compensating a manager based on his or her division's net income
Giving all employees a bonus if a certain level of efficiency is maintained
Hiring an independent consultant to study the operating efficiency of the firm
Basing management bonuses on the length of employment
Laying off employees during a slack period
Establishing the preferred debt-equity level - ✔✔Which one of the following is a capital structure decision?
Determining the optimal inventory level
Establishing the preferred debt-equity level
Selecting new equipment to purchase
Setting the terms of sale for credit sales
Determining when suppliers should be paid
Any one of the partners can be held solely liable for all of the partnership's debt - ✔✔Which one of the following applies
to a general partnership?
, The firm's operations must be controlled by a single partner.
Any one of the partners can be held solely liable for all of the partnership's debt.
The profits of the firm are taxed as a separate entity.
Each partner's liability for the firm's debts is limited to each partner's investment in the firm.
The profits of a general partnership are taxed the same as those of a corporation.
Obtaining additional equity is dependent on the owner's personal finances. - ✔✔Which one of the following statements
correctly applies to a sole proprietorship?
The business entity has an unlimited life.
The ownership can easily be transferred to another individual.
The owner enjoys limited liability for the firm's debts.
Debt financing is easy to arrange in the firm's name.
Obtaining additional equity is dependent on the owner's personal finances.
Secondary market - ✔✔You contacted your stock broker this morning and placed an order to sell 300 shares of a stock
that trades on the NYSE. This sale will occur in the:
dealer market.
over-the-counter market.
