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finance final exam with correct answers.

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finance final exam with correct answers.

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finance final exam with correct answers |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




Suppliers, customers, and employees of a corporation are called:
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




A) Shareholders.
|||\\\




B) Stakeholders.
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C) Debtors.|||\\\




D) Stockholders.
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E) Partners. - correct answer✔✔B) Stakeholders.
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A proprietorship is:
|||\\\ |||\\\




A) A business formed by two or more individuals.
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B) A separate legal body formed by an individual who has limited personal liability.
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C) A business owned by an individual who has unlimited personal liability.
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D) A business managed by a single general partner.
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E) A limited liability form of business ownership. - correct answer✔✔C) A business owned by
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




an individual who has unlimited personal liability.
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Conflicts that arise between the interests of managers and stockholders are referred to as:
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A) Control problems.
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B) Agency problems.
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C) Management conflicts.
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D) Stockholder conflicts.
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E) Proxy fights. - correct answer✔✔B) Agency problems
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The primary market includes:|||\\\ |||\\\ |||\\\

,A) The purchase and sale of shares of stock between two shareholders.
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B) The sale of stock by a shareholder in the open market.
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C) The sale of stock by a shareholder in an auction market.
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D) The sale of new securities by a corporation on an exchange.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




E) The sale of stock by a shareholder in the OTC market. - correct answer✔✔D) The sale of
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




new securities by a corporation on an exchange.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




Tasks related to tax management, cost accounting, financial accounting, and data processing
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




are the responsibility of which corporate officer?
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




A) The Corporate Treasurer
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B) The Board of Directors
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C) The Corporate Controller
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D) The Chairman of the Board
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E) The Vice President of Production - correct answer✔✔C) The Corporate Controller
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




Which of the following is an answer to "What are the duties of a financial manager?"
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




I. Deciding how much interest to pay the holders of the corporation's bonds.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




II. Deciding the mix of long-term debt and equity.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




III. Deciding which projects a firm should undertake.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




IV. Deciding how much short-term debt to use.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




A) I and II only
|||\\\ |||\\\ |||\\\ |||\\\




B) I, II, and III only
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C) II and III only
|||\\\ |||\\\ |||\\\ |||\\\




D) II, III, and IV only
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\




E) I, II, III, and IV - correct answer✔✔D) II, III, and IV only
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\

,A financial manager is responsible for deciding whether or not new manufacturing equipment
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




should be purchased to replace existing equipment. The new equipment would reduce labor|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




expenses and would allow the firm to reduce its investment in inventory. Which of the financial |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




management areas would be involved in the decision process?
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




I. Capital budgeting
|||\\\ |||\\\




II. Capital structure management
|||\\\ |||\\\ |||\\\




III. Working capital management |||\\\ |||\\\ |||\\\




A) I only |||\\\ |||\\\




B) I and II only |||\\\ |||\\\ |||\\\ |||\\\




C) II and III only |||\\\ |||\\\ |||\\\ |||\\\




D) I and III only |||\\\ |||\\\ |||\\\ |||\\\




E) I, II, and III - correct answer✔✔D) I and III only
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




Which of the following is NOT considered one of the basic questions of financial management?
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




A) What long-term investments should the firm choose.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




B) At what rate of interest should a firm borrow.
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C) Where will the firm get the long-term financing to pay for its investments.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




D) What mixture of debt and equity should the firm use to fund its operations.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




E) How should the firm manage its working capital, i.e., its everyday financial activities. -
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




correct answer✔✔B) At what rate of interest should a firm borrow. |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




- In the evaluation of cash flow in a capital budgeting decision, which of the following must be
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




considered?



I. The size of the cash flow.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\

, II. The timing of the cash flow.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




III. The risk of the cash flow.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




A) I only |||\\\ |||\\\




B) I and II only
|||\\\ |||\\\ |||\\\ |||\\\




C) II only |||\\\ |||\\\




D) II and III only
|||\\\ |||\\\ |||\\\ |||\\\




E) All the above - correct answer✔✔E) I, II, III
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




Which of the following statements is/are false concerning partnerships?
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




I. Limited partners are responsible for all debts of the partnership.
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II. Limited partners generally do not manage the partnership.
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III. In a limited partnership, all partners share equally in the gains or losses.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




A) I only |||\\\ |||\\\




B) II only |||\\\ |||\\\




C) I and II only
|||\\\ |||\\\ |||\\\ |||\\\




D) I and III only
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E) I, II, and III - correct answer✔✔D) I and III only
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




Which of the following is an advantage of ownership of a corporation compared to that of a
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\




sole proprietorship? |||\\\




A) The owners of the corporation have unlimited liability for the firm's debts.
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B) It is the simplest to start.
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C) The corporation has an unlimited life.
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