WorksheetsFinancial Management Quiz
Total questions: 14
Worksheet time: 5hrs 55mins
Which one of the following is least likely to be an agency problem?
Increasing the size of a firm
Concentrating on maximizing current profits
Closing a division with net losses
Increasing the market value of the firm's shares
Obtaining a patent for a new product
Which of the following accounts are included in working capital management?
Accounts payable
Accounts receivable
Fixed asset
Inventory
Short-term cash flow improvement may not be achieved by
Increasing trade payables
Reducing trade payables
Reducing inventories
Reducing trade receivables
A Stakeholder is:
A person who owns shares of stock
Any person who has voting rights based on stock ownership of a corporation.
A person who initially founded a firm and currently has management control over that firm.
Any person or entity other than a stockholder who potentially has a claim on the cash flows of a firm.
Which of the following questions are addressed financial managers?
How should a product be marketed?
Should customers be given 30 or 45 days to pay for their credit purchases?
Should the firm borrow less money?
Who should be recruited for the sales department?
Should the firm acquire new equipment?
Which one of the following is a capital budgeting decision?
Determining how many shares of stock to issue
Deciding whether or not to purchase a new machine for the production line
Deciding how to refinance a debt issue that is maturing
Determining how much inventory to keep on hand
Determining how much money should be kept in the checking account
Which one of the following statements concerning a sole proprietorship is correct?
A Sole proprietorship is designed to protect the personal assets of the owner.
The owner of a sole proprietorship is personally responsible for all of the company's debts.
The profits of a sole proprietorship are subject to double taxation
A sole proprietorship is structured the same as a limited liability company.
Which statement of the following is incorrect?
Dividend policy is related to the distribution of profit before tax.
A firm can choose between debt and equity to raise money.
Working capital management is related to long-term investment in fixed assets.
A new share issue is carried out on the primary market
A firm needs to evaluate customer creditworthiness before granting them credit sales.
Which one of the following forms of business organization is best suited to raising large amounts of capital?
Sole proprietorship
Limited liability company
Corporation
General partnership
Which one of the following best states the primary goal of financial management?
Maximize current dividends per share
Maximize the current value per share
Increase cash flow and avoid financial distress
Minimize operational costs while maximizing firm efficiency
Maintain steady growth while increasing current profits
Which of the following best describe the function of financial markets?
Bridge capital supply and demand
Transfer risks among market participants
Set up legal requirements for establishing companies
Provide different payment methods
Sell and buy financial assets
Which one of the following is a primary market transaction?
Sale of existing outstanding stock by a dealer to an individual investor
Sale of a new share of stock to an individual investor
Stock ownership is transferred from one shareholder to another shareholder
Gift of stock from one shareholder to another shareholder
Gift of stock by a shareholder to a family member
Which one of the following financial decisions immediately changes the firm's average cost of capital?
Invest in a new potential project
Employ more debt
Store more finished products
Increase dividend pay-out ratio
A Business created as a distinct legal entity and treated as a legal 'person' is called a:
Corporation
Sole proprietorship
Partnership
Unlimited liability company
