Solution Manual
Solution Manual
, lOMoAR cPSD| 14985576
Chapter 01: An Overview of Financial Management and the Financial Environment
1. The form of organization for a business is not an important issue, as this decision has very little effect on the income
and wealth of the firm's owners.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT FMTP.EHRH.20.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and
: analysis of public information
LOCAL STANDARDSUnited States - OH - Default City - TBA
:
TOPICS: Firm organization
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 10/31/2018 8:20 AM
DATE MODIFIED: 10/31/2018 8:20 AM
2. The major advantage of a regular partnership or a corporation as a form of business organization is the fact that both
offer their owners limited liability, whereas proprietorships do not.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT FMTP.EHRH.20.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and
: analysis of public information
LOCAL STANDARDSUnited States - OH - Default City - TBA
:
TOPICS: Firm organization
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 10/31/2018 8:20 AM
DATE MODIFIED: 10/31/2018 8:20 AM
Page 1
, lOMoAR cPSD| 14985576
Chapter 01: An Overview of Financial Management and the Financial Environment
3. There are three primary disadvantages of a regular partnership: (1) unlimited liability, (2) limited life of the
organization, and (3) difficulty of transferring ownership. These combine to make it difficult for partnerships to attract
large amounts of capital and thus to grow to a very large size.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT FMTP.EHRH.20.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and
: analysis of public information
LOCAL STANDARDSUnited States - OH - Default City - TBA
:
TOPICS: Partnership
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 10/31/2018 8:20 AM
DATE MODIFIED: 10/31/2018 8:20 AM
Page 2
, lOMoAR cPSD| 14985576
Chapter 01: An Overview of Financial Management and the Financial Environment
4. Two disadvantages of a proprietorship are (1) the relative difficulty of raising new capital and (2) the owner's unlimited
personal liability for the business' debts.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT FMTP.EHRH.20.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and
: analysis of public information
LOCAL STANDARDSUnited States - OH - Default City - TBA
:
TOPICS: Proprietorship
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 10/31/2018 8:20 AM
DATE MODIFIED: 10/31/2018 8:20 AM
5. One key value of limited liability is that it lowers owners' risks and thereby enhances a firm's value.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT FMTP.EHRH.20.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and
: analysis of public information
LOCAL STANDARDSUnited States - OH - Default City - TBA
:
TOPICS: Limited liability
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 10/31/2018 8:20 AM
DATE MODIFIED: 10/31/2018 8:20 AM
: Page 3
Downloaded by Clare Kemmy ()
Solution Manual
, lOMoAR cPSD| 14985576
Chapter 01: An Overview of Financial Management and the Financial Environment
1. The form of organization for a business is not an important issue, as this decision has very little effect on the income
and wealth of the firm's owners.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT FMTP.EHRH.20.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and
: analysis of public information
LOCAL STANDARDSUnited States - OH - Default City - TBA
:
TOPICS: Firm organization
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 10/31/2018 8:20 AM
DATE MODIFIED: 10/31/2018 8:20 AM
2. The major advantage of a regular partnership or a corporation as a form of business organization is the fact that both
offer their owners limited liability, whereas proprietorships do not.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT FMTP.EHRH.20.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and
: analysis of public information
LOCAL STANDARDSUnited States - OH - Default City - TBA
:
TOPICS: Firm organization
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 10/31/2018 8:20 AM
DATE MODIFIED: 10/31/2018 8:20 AM
Page 1
, lOMoAR cPSD| 14985576
Chapter 01: An Overview of Financial Management and the Financial Environment
3. There are three primary disadvantages of a regular partnership: (1) unlimited liability, (2) limited life of the
organization, and (3) difficulty of transferring ownership. These combine to make it difficult for partnerships to attract
large amounts of capital and thus to grow to a very large size.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT FMTP.EHRH.20.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and
: analysis of public information
LOCAL STANDARDSUnited States - OH - Default City - TBA
:
TOPICS: Partnership
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 10/31/2018 8:20 AM
DATE MODIFIED: 10/31/2018 8:20 AM
Page 2
, lOMoAR cPSD| 14985576
Chapter 01: An Overview of Financial Management and the Financial Environment
4. Two disadvantages of a proprietorship are (1) the relative difficulty of raising new capital and (2) the owner's unlimited
personal liability for the business' debts.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT FMTP.EHRH.20.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and
: analysis of public information
LOCAL STANDARDSUnited States - OH - Default City - TBA
:
TOPICS: Proprietorship
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 10/31/2018 8:20 AM
DATE MODIFIED: 10/31/2018 8:20 AM
5. One key value of limited liability is that it lowers owners' risks and thereby enhances a firm's value.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT FMTP.EHRH.20.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and
: analysis of public information
LOCAL STANDARDSUnited States - OH - Default City - TBA
:
TOPICS: Limited liability
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 10/31/2018 8:20 AM
DATE MODIFIED: 10/31/2018 8:20 AM
: Page 3
Downloaded by Clare Kemmy ()
