5) A corporate treasurer is typically responsible for each of the following duties EXCEPT A) cash management. B) credit management. C) capital expenditures. D) cost accounting.
6) The three basic types of issues addressed by the study of finance are A) capital budgeting, capital structure decisions, and working capital management. B) capital budgeting, working capital management, and investment analysis. C) capital structure decisions, working capital management, and sustained profitability. D) capital budgeting, investment analysis, and cash management.
7) Cash and credit management are typically the responsibility of the A) controller. B) vice president of production and operations. C) chief executive officer, or CEO. D) treasurer.
8) Working capital management is concerned with A) how a firm can best manage its cash flows as they arise in its day-to-day operations. B) how a firm should raise money to fund its investments. C) what long-term investments a firm should undertake. D) managing a firms capital stock.
9) Capital budgeting is concerned with A) whether a company’s assets should be financed with debt or equity. B) managing a firms cash budgeting procedures. C) what long-term investments a firm should undertake. D) planning sales of a corporation’s equity capital.
10) Determining the best way to raise money to fund a firm’s long-term investments is called A) the capital budgeting decision. B) the portfolio decision. C) the money flow processing decision. D) the capital structure decision.
11) Your friend, John, believes that since capital markets are efficient, he doesn’t need to read the financial press or be involved in stock research before purchasing stocks for his portfolio. He simply throws darts at the stock pages and buys the stocks the darts hit. Is stock research and analysis important when buying and selling stocks in an efficient market?
Learning Objective 4
1) The sole proprietorship is for all practical purposes the absence of any formal legalbusiness structure.
2) A general partnership, unlike a limited partnership, is an entity that legally functions separate and apart from its owners.
3) The best form of business entity to attract new capital is the sole proprietorship because investors only need to deal with one owner.