Reference no: EM133238752
1. If managers are not owners of their company, then they are ________.
agents
brokers
bondholders
dealers
2.
1. The wealth of corporate owners is measured by the share price of the stock.
2. To achieve the goal of profit maximization for each alternative being considered, a financial manager would select the one that is expected to result in the highest return.
BOTH STATEMENTS ARE TRUE
1ST STATEMENT IS TRUE
1ST STATEMENT IS FALSE
BOTH STATEMENTS ARE FALSE
3. NT.The goal of business ethics is to motivate business and market participants to adhere to both the letter and the spirit of laws and regulations in all aspects of business and professional practice. 2.
1ST STATEMENT IS FALSE
BOTH STATEMENTS ARE FALSE
BOTH STATEMENTS ARE TRUE
1ST STATEMENT IS TRUE
4.
1. In partnerships, partners can readily transfer their wealth to other partners.
2. Managerial finance is concerned with design and delivery of advice and financial products to individuals, businesses, and governments.
1ST STATEMENT IS TRUE
BOTH STATEMENTS ARE TRUE
1ST STATEMENT IS FALSE
BOTH STATEMENTS ARE FALSE
5.
1. Risk, the magnitude and timing of cash flows are the key determinants of share price, which represent the wealth of the owners in the firm. 2. A higher earnings per share (EPS) does not necessarily translate into a higher stock price.
BOTH STATEMENTS ARE FALSE
1ST STATEMENT IS FALSE
BOTH STATEMENTS ARE TRUE
1ST STATEMENT IS TRUE
6. Which of the following legal forms of organizations is characterized by unlimited liability?
sole proprietorship
limited partnership
Cooperative
Corporation
7.
1. Financial managers perform different tasks developing a financial plan or budget, extending credit to customers, evaluating proposed large expenditures, and raising money to fund a firm's operations.
2. A controller administers a firm's credit policy by analyzing or managing the evaluation of credit applications, extending credit, and monitoring and collecting accounts receivable.
1ST STATEMENT IS TRUE
BOTH STATEMENTS ARE FALSE
BOTH STATEMENTS ARE TRUE
1ST STATEMENT IS FALSE
8. Which of the following is true of stakeholders?
A firm's income statement will never show a positive profit when its cash outflows exceed its cash inflows
Profits do not necessarily result in cash flows available to the stockholders.
An increase in revenue will always result in an increase in cash flow
It is guaranteed that the board of directors will increase dividends when net cash flows increase.
9. Which of the following is true of a cash flow?
A firm's income statement will never show a positive profit when its cash outflows exceed its cash inflows
Profits do not necessarily result in cash flows available to the stockholders.
It is guaranteed that the board of directors will increase dividends when net cash flows increase.
An increase in revenue will always result in an increase in cash flow
10.
1. High net cash flow with fixed risk is generally associated with a higher share price.
2. When considering a firm's financial decision alternative, financial managers should accept only those actions that are expected to increase the firm's profitability.
1ST STATEMENT IS FALSE
BOTH STATEMENTS ARE FALSE
BOTH STATEMENTS ARE TRUE
1ST STATEMENT IS TRUE
11. Cash flows and risk are the key determinants in share price. Increased cash flow results in ________, other things remaining the same.
an unchanged share price
an undetermined share price
a higher share price
a lower share price
12. The wealth of the owners of a corporation is represented by
cash flow
profits
share value
earnings per share
13. Corporate owners receive return ________.
· by realizing gains through increases in share price and interest earnings
· through interest earnings and earnings per share
· through capital appreciation and retained earnings
· by realizing gains through increases in share price and cash dividends