财务管理hp习题.docx

财务管理hp习题.docx

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财务管理hp习题

Chapter01

IntroductiontoCorporateFinance

MultipleChoiceQuestions

?

1.?

Thepersongenerallydirectlyresponsibleforoverseeingthetaxmanagement,costaccounting,financialaccounting,andinformationsystemfunctionsisthe:

?

A.?

treasurer.

B.?

director.

C.?

controller.

D.?

chairmanoftheboard.

E.?

chiefexecutiveofficer.

2.?

Thepersongenerallydirectlyresponsibleforoverseeingthecashandcreditfunctions,financialplanning,andcapitalexpendituresisthe:

?

A.?

treasurer.

B.?

director.

C.?

controller.

D.?

chairmanoftheboard.

E.?

chiefoperationsofficer.

3.?

Theprocessofplanningandmanagingafirm'slong-terminvestmentsiscalled:

?

A.?

workingcapitalmanagement.

B.?

financialdepreciation.

C.?

agencycostanalysis.

D.?

capitalbudgeting.

E.?

capitalstructure.

4.?

Themixtureofdebtandequityusedbyafirmtofinanceitsoperationsiscalled:

?

A.?

workingcapitalmanagement.

B.?

financialdepreciation.

C.?

costanalysis.

D.?

capitalbudgeting.

E.?

capitalstructure.

5.?

Themanagementofafirm'sshort-termassetsandliabilitiesiscalled:

?

A.?

workingcapitalmanagement.

B.?

debtmanagement.

C.?

equitymanagement.

D.?

capitalbudgeting.

E.?

capitalstructure.

6.?

Abusinessownedbyasingleindividualiscalleda:

?

A.?

corporation.

B.?

soleproprietorship.

C.?

generalpartnership.

D.?

limitedpartnership.

E.?

limitedliabilitycompany.

7.?

Abusinessformedbytwoormoreindividualswhoeachhaveunlimitedliabilityforbusinessdebtsiscalleda:

?

A.?

corporation.

B.?

soleproprietorship.

C.?

generalpartnership.

D.?

limitedpartnership.

E.?

limitedliabilitycompany.

8.?

Thedivisionofprofitsandlossesamongthemembersofapartnershipisformalizedinthe:

?

A.?

indemnityclause.

B.?

indenturecontract.

C.?

statementofpurpose.

D.?

partnershipagreement.

E.?

groupcharter.

9.?

Abusinesscreatedasadistinctlegalentitycomposedofoneormoreindividualsorentitiesiscalleda:

?

A.?

corporation.

B.?

soleproprietorship.

C.?

generalpartnership.

D.?

limitedpartnership.

E.?

unlimitedliabilitycompany.

10.?

Thecorporatedocumentthatsetsforththebusinesspurposeofafirmisthe:

?

A.?

indenturecontract.

B.?

statetaxagreement.

C.?

corporatebylaws.

D.?

debtcharter.

E.?

articlesofincorporation.

11.?

Therulesbywhichcorporationsgovernthemselvesarecalled:

?

A.?

indentureprovisions.

B.?

indemnityprovisions.

C.?

charteragreements.

D.?

bylaws.

E.?

articlesofincorporation.

12.?

Abusinessentityoperatedandtaxedlikeapartnership,butwithlimitedliabilityfortheowners,iscalleda:

?

A.?

limitedliabilitycompany.

B.?

generalpartnership.

C.?

limitedproprietorship.

D.?

soleproprietorship.

E.?

corporation.

13.?

Theprimarygoaloffinancialmanagementisto:

?

A.?

maximizecurrentdividendspershareoftheexistingstock.

B.?

maximizethecurrentvaluepershareoftheexistingstock.

C.?

avoidfinancialdistress.

D.?

minimizeoperationalcostsandmaximizefirmefficiency.

E.?

maintainsteadygrowthinbothsalesandnetearnings.

14.?

Aconflictofinterestbetweenthestockholdersandmanagementofafirmiscalled:

?

A.?

stockholders'liability.

B.?

corporatebreakdown.

C.?

theagencyproblem.

D.?

corporateactivism.

E.?

legalliability.

15.?

Agencycostsreferto:

?

A.?

thetotaldividendspaidtostockholdersoverthelifetimeofafirm.

B.?

thecoststhatresultfromdefaultandbankruptcyofafirm.

C.?

corporateincomesubjecttodoubletaxation.

D.?

thecostsofanyconflictsofinterestbetweenstockholdersandmanagement.

E.?

thetotalinterestpaidtocreditorsoverthelifetimeofthefirm.

16.?

Astakeholderis:

?

A.?

anypersonorentitythatownssharesofstockofacorporation.

B.?

anypersonorentitythathasvotingrightsbasedonstockownershipofacorporation.

C.?

apersonwhoinitiallystartedafirmandcurrentlyhasmanagementcontroloverthecashflowsofthefirmduetohis/hercurrentownershipofcompanystock.

D.?

acreditortowhomthefirmcurrentlyowesmoneyandwhoconsequentlyhasaclaimonthecashflowsofthefirm.

E.?

anypersonorentityotherthanastockholderorcreditorwhopotentiallyhasaclaimonthecashflowsofthefirm.

17.?

TheSarbanesOxleyActof2002isintendedto:

?

A.?

protectfinancialmanagersfrominvestors.

B.?

nothaveanyeffectonforeigncompanies.

C.?

reducecorporaterevenues.

D.?

protectinvestorsfromcorporateabuses.

E.?

decreaseauditcostsfor.firms.

18.?

Thetreasurerandthecontrollerofacorporationgenerallyreporttothe:

?

A.?

boardofdirectors.

B.?

chairmanoftheboard.

C.?

chiefexecutiveofficer.

D.?

president.

E.?

chieffinancialofficer.

19.?

Whichoneofthefollowingstatementsiscorrectconcerningtheorganizationalstructureofacorporation?

?

A.?

Thevicepresidentoffinancereportstothechairmanoftheboard.

B.?

Thechiefexecutiveofficerreportstotheboardofdirectors.

C.?

Thecontrollerreportstothepresident.

D.?

Thetreasurerreportstothechiefexecutiveofficer.

E.?

Thechiefoperationsofficerreportstothevicepresidentofproduction.

20.?

Whichoneofthefollowingisacapitalbudgetingdecision?

?

A.?

determininghowmuchdebtshouldbeborrowedfromaparticularlender

B.?

decidingwhetherornottoopenanewstore

C.?

decidingwhentorepayalong-termdebt

D.?

determininghowmuchinventorytokeeponhand

E.?

determininghowmuchmoneyshouldbekeptinthecheckingaccount

21.?

TheSarbanesOxleyActwasenactedin:

?

A.?

1952.

B.?

1967.

C.?

1998.

D.?

2002.

E.?

2006.

22.?

SincetheimplementationofSarbanes-Oxley,thecostofgoingpublicintheUnitedStateshas:

?

A.?

increased.

B.?

decreased.

C.?

remainedaboutthesame.

D.?

beenerratic,butovertimehasdecreased.

E.?

ItisimpossibletotellsinceSarbanes-Oxleycompliancedoesnotinvolvedirectcosttothefirm.

23.?

Workingcapitalmanagementincludesdecisionsconcerningwhichofthefollowing?

I.accountspayable

II.long-termdebt

III.accountsreceivable

IV.inventory?

A.?

IandIIonly

B.?

IandIIIonly

C.?

IIandIVonly

D.?

I,II,andIIIonly

E.?

I,III,andIVonly

24.?

Workingcapitalmanagement:

?

A.?

ensuresthatsufficientequipmentisavailabletoproducetheamountofproductdesiredonadailybasis.

B.?

ensuresthatlong-termdebtisacquiredatthelowestpossiblecost.

C.?

ensuresthatdividendsarepaidtoallstockholdersonanannualbasis.

D.?

balancestheamountofcompanydebttotheamountofavailableequity.

E.?

isconcernedwiththeupperportionofthebalancesheet.

25.?

Whichoneofthefollowingstatementsconcerningasoleproprietorshipiscorrect?

?

A.?

Asoleproprietorshipistheleastcommonformofbusinessownership.

B.?

Theprofitsofasoleproprietorshiparetaxedtwice.

C.?

Theownersofasoleproprietorshipshareprofitsasestablishedbythepartnershipagreement.

D.?

Theownerofasoleproprietorshipmaybeforcedtosellhis/herpersonalassetstopaycompanydebts.

E.?

Asoleproprietorshipisoftenstructuredasalimitedliabilitycompany.

26.?

Whichoneofthefollowingstatementsconcerningasoleproprietorshipiscorrect?

?

A.?

Thelifeofthefirmislimitedtothelifespanoftheowner.

B.?

Theownercangenerallyraiselargesumsofcapitalquiteeasily.

C.?

Theownershipofthefirmiseasytotransfertoanotherindividual.

D.?

Thecompanymustpayseparatetaxesfromthosepaidbytheowner.

E.?

Thelegalcoststoformasoleproprietorshiparequitesubstantial.

27.?

Whichoneofthefollowingbestdescribestheprimaryadvantageofbeingalimitedpartnerratherthanageneralpartner?

?

A.?

entitlementtoalargerportionofthepartnership'sincome

B.?

abilitytomanagetheday-to-dayaffairsofthebusiness

C.?

nopotentialfinancialloss

D.?

greatermanagementresponsibility

E.?

liabilityforfirmdebtslimitedtothecapitalinvested

28.?

Ageneralpartner:

?

A.?

haslesslegalliabilitythanalimitedpartner.

B.?

hasmoremanagementresponsibilitythanalimitedpartner.

C.?

facesdoubletaxationwhereasalimitedpartnerdoesnot.

D.?

cannotlosemorethantheamountofhis/herequityinvestment.

E.?

isthetermappliedonlytocorporationswhichinvestinpartnerships.

29.?

Apartnership:

?

A.?

istaxedthesameasacorporation.

B.?

agreementdefineswhetherthebusinessincomewillbetaxedlikeapartnershiporacorporation.

C.?

terminatesatthedeathofanygeneralpartner.

D.?

haslessofanabilitytoraisecapitalthanaproprietorship.

E.?

allowsforeasytransferofinterestfromonegeneralpartnertoanother.

30.?

Whichofthefollowingaredisadvantagesofapartnership?

I.limitedlifeofthefirm

II.personalliabilityforfirmdebt

III.greaterabilitytoraisecapitalthanasoleproprietorship

IV.lackofabilitytotransferpartnershipinterest?

A.?

IandIIonly

B.?

IIIandIVonly

C.?

IIandIIIonly

D.?

I,II,andIVonly

E.?

I,III,andIVonly

31.?

Whichofthefollowingareadvantagesofthecorporateformofbusinessownership?

I.limitedliabilityforfirmdebt

II.doubletaxation

III.abilitytoraisecapital

IV.unlimitedfirmlife?

A.?

IandIIonly

B.?

IIIandIVonly

C.?

I,II,andIIIonly

D.?

II,III,andIVonly

E.?

I,III,andIVonly

32.?

Whichoneofthefollowingstatementsiscorrectconcerningcorporations?

?

A.?

Thelargestfirmsareusuallycorporations.

B.?

Themajorityoffirmsarecorporations.

C.?

Thestockholdersareusuallythemanagersofacorporation.

D.?

Theabilityofacorporationtoraisecapitalisquitelimited.

E.?

Theincomeofacorporationistaxedaspersonalincomeofthestockholders.

33.?

Whichoneofthefollowingstatementsiscorrect?

?

A.?

Bothpartnershipsandcorporationsincurdoubletaxation.

B.?

Bothsoleproprietorshipsandpartnershipsaretaxedinasimilarfashion.

C.?

Partnershipsarethemostcomplicatedtypeofbusinesstoform.

D.?

Bothpartnershipsandcorporations