Business Finance Ch 1-2

What is the main goal of financial management?

• Sell a lot of products

• Make more employees

• Maximize the value of the company

• Reduce the number of stockholders

Which one is NOT a current asset?

• Cash

• Inventory

• Equipment

• Account Receivable

What is a mutual fund?

• A bank

• A type of insurance

• A financial intermediary

• A restaurant

What is a good way to increase a company’s value?

• Fire all staff

• Increase market share

• Stop selling

• Hide financial reports

In a sole proprietorship, who gets all the profit?

• The government

• The bank

• The owner

• The employees

What is a disadvantage of a partnership?

• Less capital

• No teamwork

• Possible conflicts between owners

• Only one owner

What is the difference between private and public limited company?

• Public companies sell shares on the market

• Private companies are illegal

• Public companies can't get loans

• Private companies pay more taxes

What is one disadvantage of a sole proprietorship?

• Double taxation

• Limited liability

• Difficult to start

• Unlimited liability

What is book value?

• Price in the future

• Value based on history

• Guess value

• Random number

How to find net income?

• Expenses - Revenue

• Revenue - Expenses

• Revenue + Expenses

• Revenue ÷ Expenses