Intermediate Financial Management 14th Edition 14e
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Test Bank For Intermediate Financial Management 14th Edition
14e By Eugene F Brigham Daves A+
Chapter 01: An Overview of Financial Management and the Financial Environment
1. The form of organization for a business is not an important issue, as this decision has
very little effect on the income and wealth of the firm's owners.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty: Easy QUESTION TYPE: True / False HAS VARIABLES:
False
LEARNING OBJECT IFMG.DAVE.19.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS: United States - AK - DISC: Goals of the firm, role of - DISC: Goals of
the firm, role of finance, and analysis of public information
LOCAL STANDARD United States - OH - Default City - TBA
S:
TOPICS: Firm organization KEYWORDS: Bloom’s: Knowledge DATE CREATED:
10/30/2017 8:01 PM DATE MODIFIED: 1/6/2018 12:00 PM
2. The major advantage of a regular partnership or a corporation as a form of business
organization is the fact that both offer their owners limited liability, whereas proprietorships do
not.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty: Easy QUESTION TYPE: True / False HAS VARIABLES:
False
A+ Page 1
,Created By: A Solution
LEARNING OBJECT IFMG.DAVE.19.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS: United States - AK - DISC: Goals of the firm, role of - DISC: Goals of
the firm, role of finance, and analysis of public information
LOCAL STANDARD United States - OH - Default City - TBA
S:
TOPICS: Firm organization KEYWORDS: Bloom’s: Knowledge DATE CREATED:
10/30/2017 8:01 PM DATE MODIFIED: 1/6/2018 12:00 PM
3. There are three primary disadvantages of a regular partnership: (1) unlimited liability, (2)
limited life of the organization, and (3) difficulty of transferring ownership. These combine to
make it difficult for partnerships to attract large amounts of capital and thus to grow to a very
large size.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty: Easy QUESTION TYPE: True / False HAS VARIABLES:
False
LEARNING OBJECT IFMG.DAVE.19.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS: United States - AK - DISC: Goals of the firm, role of - DISC: Goals of
the firm, role of finance, and analysis of public information
LOCAL STANDARD United States - OH - Default City - TBA
S:
TOPICS: Partnership KEYWORDS: Bloom’s: Knowledge DATE CREATED:
10/30/2017 8:01 PM DATE MODIFIED: 1/6/2018 12:00 PM
A+ Page 2
,Created By: A Solution
4. Two disadvantages of a proprietorship are (1) the relative difficulty of raising new capital
and (2) the owner's unlimited personal liability for the business' debts.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty: Easy QUESTION TYPE: True / False HAS VARIABLES:
False
LEARNING OBJECT IFMG.DAVE.19.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS: United States - AK - DISC: Goals of the firm, role of - DISC: Goals of
the firm, role of finance, and analysis of public information
LOCAL STANDARD United States - OH - Default City - TBA
S:
TOPICS: Proprietorship KEYWORDS: Bloom’s: Knowledge DATE CREATED:
10/30/2017 8:01 PM DATE MODIFIED: 1/6/2018 12:00 PM
5. One key value of limited liability is that it lowers owners' risks and thereby enhances a
firm's value.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty: Easy QUESTION TYPE: True / False HAS VARIABLES:
False
LEARNING OBJECT IFMG.DAVE.19.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
A+ Page 3
, Created By: A Solution
STATE STANDARDS: United States - AK - DISC: Goals of the firm, role of - DISC: Goals of
the firm, role of finance, and analysis of public information
LOCAL STANDARD United States - OH - Default City - TBA
S:
TOPICS: Limited liability KEYWORDS: Bloom’s: Knowledge DATE CREATED:
10/30/2017 8:01 PM DATE MODIFIED: 1/6/2018 12:00 PM
6. The disadvantages associated with a proprietorship are similar to those under a
partnership. One exception relates to the more formal nature of the partnership agreement and
the commitment of all partners' personal assets. As a result, partnerships do not have difficulty
raising large amounts of capital.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty: Moderate
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECT IFMG.DAVE.19.01.03 - LO: 1-3
IVES:
NATIONAL STANDA United States - BUSPROG: Reflective Thinking
RDS:
STATE STANDARDS: United States - AK - DISC: Goals of the firm, role of - DISC: Goals of
the firm, role of finance, and analysis of public information
LOCAL STANDARD United States - OH - Default City - TBA
S:
TOPICS: Partnership KEYWORDS: Bloom’s: Comprehension DATE CREATED:
10/30/2017 8:01 PM DATE MODIFIED: 1/6/2018 12:00 PM
A+ Page 4
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