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FIN 300 EXAM 1 QUESTIONS AND ANSWERS 2024
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FIN 300 EXAM 1 QUESTIONS AND ANSWERS 2024
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FIN 300 EXAM 1A Subchapter S corporation:
is a large corporation
has limited liability for its owners
is double taxed
has unlimited liability for its owners - ANSWERS-has limited liability for its owners
One of the most important disadvantages of the corporate form of business is:
shares that can be sold
professional managers
double taxation
unlimited owner liability - ANSWERS-double taxation
A manager has responsibilities to stockholders:
for legal and ethical issues
only at firms that are public corporations
never
only where legal issues apply - ANSWERS-or legal and ethical issues
,Problems with seeking profit as a goal of the firm would include each of the
following except:
profit is completely unrelated to cash flow
profit goals involve timing issues
accountants have different ways of measuring profit
profit is only a proxy for cash flow - ANSWERS-accountants have different ways of
measuring profit
Which statement is correct about limited partners?
they have management control equal to their percent of investment
they have no tax liability
they can lose only one half of their initial investment
there is no limit to the number of limited partners that may participate -
ANSWERS-there is no limit to the number of limited partners that may
Which of the following would least affect the value of a firm's stock?
cashflows
market share
timing on cash flows
risk associated with receiving cash flows - ANSWERS-market share
Profit maximization as a goal of the firm:
, is an economic principle and not an accounting one
is superior to other goals that could be pursued
maximizes the wealth of the owners
does not consider cash flow or risk - ANSWERS-does not consider cash flow or risk
Wealth maximization as a goal of the firm:
is usually discounted by bondholders
takes a long-run perspective and focuses on the owners of the firm
is a long-run perspective used by financial managers for internal use only
is an accounting number - ANSWERS-takes a long-run perspective and focuses on
the owners of the firm
An important advantage a general partner usually has is:
limited liability
usually a larger share of profit distribution when the firm is successful
unlimited liability
profits received are tax-free - ANSWERS-usually a larger share of profit
distribution when the firm is successful
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