Feasability Study

Topics: Corporation, Finance, Financial services Pages: 20 (8655 words) Published: February 27, 2013
Chapter 1
The Role and Environment of Managerial Finance Learning Goal 1: Define finance, its major areas and opportunities, and the legal forms of business organization. 1.1.1) A financial analyst is responsible for maintaining and controlling the firmʹs daily cash balances. Frequently manages the firmʹs short-term investments and coordinates short-term borrowing and banking relationships. Answer: FALSE Topic: Career Opportunities

1.1.2) Finance is concerned with the process institutions, markets, and instruments involved in the transfer of money among and between individuals, businesses and government. Answer: TRUE Topic: Finance Defined

1.1.3) Financial services are concerned with the duties of the financial manager. Answer: FALSE Topic: Role of Financial Manager

1.1.4) Financial managers actively manage the financial affairs of many types of business -financial and non-financial, private and public, for-profit and not-for-profit. Answer: TRUE Topic: Role of Financial Manager

1.1.5) In partnerships, owners have unlimited liability and may have to cover debts of other less financially sound partners. Answer: TRUE Topic: Legal Form of Organization

1.1.6) In partnerships, a partner can readily transfer his/her wealth to other partners. Answer: FALSE Topic: Legal Form of Organization

1.1.7) The board of directors is responsible for managing day-to-day operations and carrying out the policies established by the chief executive officer. Answer: FALSE Topic: Corporate Governance

1.1.8) The sole proprietor has unlimited liability; his or her total investment in the business, but not his or her personal assets, can be taken to satisfy creditors. Answer: FALSE Topic: Legal Form of Organization

1.1.9) In limited partnerships, only one partner may assume limited liability. All other partners have to have unlimited liability. Answer: FALSE Topic: Legal Form of Organization

2     Gitman  ·  Principles of Managerial Finance, 12e

1.1.10) The president or chief executive officer is elected by the firmʹs stockholders and has ultimate authority to guide corporate affairs and make general policy. Answer: FALSE Topic: Corporate Governance

1.1.11) In limited partnerships, all partnersʹ liabilities are limited to their investment in the partnership. Answer: FALSE Topic: Legal Form of Organization

1.1.12) In limited liability partnerships, the liability protection does not protect partners from their own individual acts of malpractice. Answer: TRUE Topic: Legal Form of Organization

1.1.13) The capital expenditures analyst/manager is responsible for the evaluation and recommendation of proposed asset investments and may be involved in the financial aspects of implementation of approved investments. Answer: TRUE Topic: Managerial Finance Functions

1.1.14) The financial analyst administers the firmʹs credit policy by analyzing or managing the evaluation of credit applications, extending credit, and monitoring and collecting accounts receivable. Answer: FALSE Topic: Managerial Finance Functions

1.1.15) In large companies, the project finance manager is responsible for coordinating the assets and liabilities of the employeesʹ pension fund. Answer: FALSE Topic: Managerial Finance Functions

1.1.16) In S corporations, stockholders receive all of the organizational benefits of a corporation and the tax advantages of a partnership, but lose certain tax advantages related to pension plans that are available to traditional corporations. Answer: TRUE Topic: Legal Form of Organization

1.1.17) Unlike an S corporation, the limited liability corporation (LLC) can own more than 80 percent of another corporation, and corporations, partnerships, or non -U.S. residents can own limited liability corporation shares. Answer: TRUE Topic: Legal Form of Organization

1.1.18) In limited liability partnership, all partners have limited liability with regard to the business...
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