FIN/571 QUIZ ONE (2015) 9/9 CORRECT ANSWERS
ENGLISH INSTRUCTORFin/ 571 quiz 1
1- Which of the following business organizational forms subjects the owner(s) to unlimited liability?
a- Sole proprietorship
b- Partnership
c- Corporation
d- A and B
2-Which of the following business organizational forms is easiest to raise capital?
a- Sole proprietorship
b- Partnership
c- Corporation
d- A and B
3- Which organizational form best enables the owners of the firm to monitor the actions of other owners of the same firm?
a- Partnership
b- Public corporation
c- Sole proprietorship
d- Private corporation
4- Which of the following factors or activities can be controlled by the management of the firm?
a- Capital budgeting
b- The level of interest rates
c- The level of economic activity
d- Stock market conditions
5- The legal system and market forces impose substantial costs on individuals and institutions that engage in unethical behavior. Which of the following would not be an example of the above?
a- Jail time
b- Legal fines
c- Agency conflicts
d- Financial losses
6- The most common reason that corporation firms use the futures and options markets is
a- None of these
b- To hedge risk
c- To take risk
d- To make deposits
7- Galan Associates prepared its financial statement for 2008 based on the information given here. The company had cash worth $ 1,234, inventory worth $ 13,480, and accounts receivables of $7,789. The company’s next fixed assets are $42, 331, and other assets are $ 1,822. It had accounts payables of $9,558, notes payables of $2,756, common stock of $22,000, and retained earnings of $14,008. How much long-term debt does the firm have?
a- $12,314
b- $76,342
c- $18,334
d- $54,342
8- Tre-Bien Bakeries generated net income of $233, 412 this year. At year end, the company had accounts receivables of $47,199, inventory of $ 63,781, and cash of $21,461. It also had accounts payables of $51,369, short-term notes payables of $ 11,417, and accrued taxes of $6,145. The net working capital of the firm is
a- $63,510
b- None of these
c- $68,931
d- $69,655
9- Which of the following best represents cash flows to investors?
a- Earnings before interest and taxes times 1 minus the firm’s tax rate.
b- Cash flow from operating activity, plus cash flow generated from net working capital.
c- Net income, minus dividends paid to preferred stockholders.
d- Cash flow operating activity, minus cash flow invested in net working capital, minus cash flow invested in long-term assets.
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