羅斯公司理財chap001全英文題庫及答案

1、Chapter 01 - Introduction to Corporate Finance1- Chapter 01 Introduction to Corporate FinanceAnswer KeyMultiple Choice Questions1. The person generally directly responsible for overseeing the tax management, cost accounting, financial accounting, and information system functions is the:treasurer.dir

2、ector.controller.chairman of the board.chief executive officer.Difficulty level: EasyTopic: CONTROLLERType: DEFINITIONSThe person generally directly responsible for overseeing the cash and credit functions, financial planning, and capital expenditures is the:A treasurer.director.controller.chairman

3、of the board.chief operations officer.The process of planning and managing a firms long-term investments is called: A. working capital management.financial depreciation.agency cost analysis.capital budgeting.capital structure.Difficulty level: EasyTopic: CAPITAL BUDGETINGType: DEFINITIONSThe mixture

4、 of debt and equity used by a firm to finance its operations is called:working capital management.financial depreciation.cost analysis.capital budgeting.capital structure.The management of a firms short-term assets and liabilities is called:working capital management.debt management.equity managemen

5、t.capital budgeting.capital structure.A business owned by a single individual is called a:corporation.sole proprietorship.general partnership.limited partnership.limited liability company.A business formed by two or more individuals who each have unlimited liability for business debts is called a:co

6、rporation.sole proprietorship.general partnership.limited partnership.limited liability company.The division of profits and losses among the members of a partnership is formalized in the:indemnity clause.indenture contract.statement of purpose.partnership agreement.group charter.A business created a

7、s a distinct legal entity composed of one or more individuals or entities is called a:A corporation.sole proprietorship.general partnership.limited partnership.unlimited liability company.Difficulty level: Easy Topic: CORPORATION Type: DEFINITIONSThe corporate document that sets forth the business p

8、urpose of a firm is the: A. indenture contract.state tax agreement.corporate bylaws.debt charter.articles of incorporation.The rules by which corporations govern themselves are called:indenture provisions.indemnity provisions.charter agreements.bylaws.articles of incorporation.A business entity oper

9、ated and taxed like a partnership, but with limited liability for the owners, is called a:A limited liability company .general partnership.limited proprietorship.sole proprietorship.corporation.The primary goal of financial management is to:maximize current dividends per share of the existing stock.

10、maximize the current value per share of the existing stock.avoid financial distress.minimize operational costs and maximize firm efficiency.maintain steady growth in both sales and net earnings.A conflict of interest between the stockholders and management of a firm is called:stockholders liability.

11、corporate breakdown.the agency problemcorporate activism.legal liability.Agency costs refer to:the total dividends paid to stockholders over the lifetime of a firm.the costs that result from default and bankruptcy of a firm.corporate income subject to double taxation.the costs of any conflicts of in

12、terest between stockholders and management.the total interest paid to creditors over the lifetime of the firm.A stakeholder is:any person or entity that owns shares of stock of a corporation.any person or entity that has voting rights based on stock ownership of a corporation.a person who initially

13、started a firm and currently has management control over the cash flows of the firm due to his/her current ownership of company stock.a creditor to whom the firm currently owes money and who consequently has a claim on the cash flows of the firm.any person or entity other than a stockholder or credi

14、tor who potentially has a claim on the cash flows of the firm.The Sarbanes Oxley Act of 2002 is intended to:protect financial managers from investors.not have any effect on foreign companies.reduce corporate tect investors from corporate abuses.decrease audit costs for U.S. firms.The tre

15、asurer and the controller of a corporation generally report to the:board of directors.chairman of the board.chief executive officer.president.chief financial officer.Which one of the following statements is correct concerning the organizational structure of a corporation?The vice president of financ

16、e reports to the chairman of the board.The chief executive officer reports to the board of directors.The controller reports to the president.The treasurer reports to the chief executive officer.The chief operations officer reports to the vice president of production.Difficulty level: MediumTopic: OR

17、GANIZATIONAL STRUCTUREType: CONCEPTSWhich one of the following is a capital budgeting decision?determining how much debt should be borrowed from a particular lenderdeciding whether or not to open a new storedeciding when to repay a long-term debtdetermining how much inventory to keep on handdetermin

18、ing how much money should be kept in the checking accountThe Sarbanes Oxley Act was enacted in:A. 1952.B. 1967.C. 1998.D. 2002.E. 2006.Since the implementation of Sarbanes-Oxley, the cost of going public in the United States has:increased.decreased.remained about the same.been erratic, but over time

19、 has decreased.It is impossible to tell since Sarbanes-Oxley compliance does not involve direct cost to the firm.23. Working capital management includes decisions concerning which of the following?accounts payablelong-term debtaccounts receivableinventoryI and II onlyI and III onlyII and IV onlyI, I

20、I, and III onlyI, III, and IV onlyDifficulty level: MediumTopic: WORKING CAPITAL MANAGEMENTType: CONCEPTSWorking capital management:ensures that sufficient equipment is available to produce the amount of product desired on a daily basis.ensures that long-term debt is acquired at the lowest possible

21、cost.ensures that dividends are paid to all stockholders on an annual basis.balances the amount of company debt to the amount of available equity.is concerned with the upper portion of the balance sheet.Difficulty level: EasyTopic: WORKING CAPITAL MANAGEMENTType: CONCEPTSWhich one of the following s

22、tatements concerning a sole proprietorship is correct?A sole proprietorship is the least common form of business ownership.The profits of a sole proprietorship are taxed twice.The owners of a sole proprietorship share profits as established by the partnership agreement.The owner of a sole proprietor

23、ship may be forced to sell his/her personal assets to pay company debts.A sole proprietorship is often structured as a limited liability company.Difficulty level: EasyTopic: SOLE PROPRIETORSHIPType: CONCEPTSWhich one of the following statements concerning a sole proprietorship is correct?A The life

24、of the firm is limited to the life span of the owner.The owner can generally raise large sums of capital quite easily.The ownership of the firm is easy to transfer to another individual.The company must pay separate taxes from those paid by the owner.The legal costs to form a sole proprietorship are

25、 quite substantial.Difficulty level: EasyTopic: SOLE PROPRIETORSHIPType: CONCEPTSWhich one of the following best describes the primary advantage of being a limited partner rather than a general partner?entitlement to a larger portion of the partnerships incomeability to manage the day-to-day affairs

26、 of the businessno potential financial lossgreater management responsibilityliability for firm debts limited to the capital investedDifficulty level: EasyTopic: PARTNERSHIPType: CONCEPTSA general partner:has less legal liability than a limited partner.has more management responsibility than a limite

27、d partner.faces double taxation whereas a limited partner does not.cannot lose more than the amount of his/her equity investment.is the term applied only to corporations which invest in partnerships.Difficulty level: EasyTopic: PARTNERSHIPType: CONCEPTSA partnership:is taxed the same as a corporatio

28、n.agreement defines whether the business income will be taxed like a partnership or a corporation.terminates at the death of any general partner.has less of an ability to raise capital than a proprietorship.allows for easy transfer of interest from one general partner to another.Difficulty level: Ea

29、syTopic: PARTNERSHIPType: CONCEPTSWhich of the following are disadvantages of a partnership?limited life of the firmpersonal liability for firm debtgreater ability to raise capital than a sole proprietorshiplack of ability to transfer partnership interestI and II onlyIII and IV onlyII and III onlyI,

30、 II, and IV onlyI, III, and IV onlyDifficulty level: Medium Topic: PARTNERSHIP Type: CONCEPTSWhich of the following are advantages of the corporate form of business ownership?limited liability for firm debtdouble taxationability to raise capitalunlimited firm lifeI and II onlyIII and IV onlyI, II, a

31、nd III onlyII, III, and IV onlyI, III, and IV onlyDifficulty level: MediumTopic: CORPORATIONType: CONCEPTSWhich one of the following statements is correct concerning corporations?A The largest firms are usually corporations.The majority of firms are corporations.The stockholders are usually the mana

32、gers of a corporation.The ability of a corporation to raise capital is quite limited.The income of a corporation is taxed as personal income of the stockholders.Difficulty level: Easy Topic: CORPORATION Type: CONCEPTSWhich one of the following statements is correct?Both partnerships and corporations

33、 incur double taxation.Both sole proprietorships and partnerships are taxed in a similar fashion.Partnerships are the most complicated type of business to form.Both partnerships and corporations have limited liability for general partners and shareholders.All types of business formations have limite

34、d lives.Difficulty level: MediumTopic: BUSINESS TYPESType: CONCEPTSThe articles of incorporation:can be used to remove company management.are amended annually by the company stockholders.set forth the number of shares of stock that can be issued.set forth the rules by which the corporation regulates

35、 its existence.can set forth the conditions under which the firm can avoid double taxation.The bylaws:establish the name of the corporation.are rules which apply only to limited liability companies.set forth the purpose of the firm.mandate the procedure for electing corporate directors.set forth the

36、 procedure by which the stockholders elect the senior managers of the firm.The owners of a limited liability company prefer:being taxed like a corporation.having liability exposure similar to that of a sole proprietor.being taxed personally on all business income.having liability exposure similar to

37、 that of a general partner.being taxed like a corporation with liability like a partnership.Difficulty level: MediumTopic: LIMITED LIABILITY COMPANYType: CONCEPTSWhich one of the following business types is best suited to raising large amounts of capital?sole proprietorshiplimited liability companyc

38、orporationgeneral partnershiplimited partnershipDifficulty level: EasyTopic: CORPORATIONType: CONCEPTSWhich type of business organization has all the respective rights and privileges of a legal person?sole proprietorshipgeneral partnershiplimited partnershipcorporationlimited liability companyDiffic

39、ulty level: EasyTopic: CORPORATIONType: CONCEPTSFinancial managers should strive to maximize the current value per share of the existing stock because:doing so guarantees the company will grow in size at the maximum possible rate.doing so increases the salaries of all the employees.the current stock

40、holders are the owners of the corporation.doing so means the firm is growing in size faster than its competitors.the managers often receive shares of stock as part of their compensation.Difficulty level: EasyTopic: GOAL OF FINANC IAL MANAGEMENTType: CONCEPTSThe decisions made by financial managers s

41、hould all be ones which increase the: A. size of the firm.growth rate of the firm.marketability of the managers.market value of the existing owners equity.financial distress of the firm.Difficulty level: EasyTopic: GOAL OF FINANCIAL MANAGEMENTType: CONCEPTSWhich one of the following actions by a fin

42、ancial manager creates an agency problem?refusing to borrow money when doing so will create losses for the firmrefusing to lower selling prices if doing so will reduce the net profitsagreeing to expand the company at the expense of stockholders valueagreeing to pay bonuses based on the book value of

43、 the company stockincreasing current costs in order to increase the market value of the stockholders equityWhich of the following help convince managers to work in the best interest of the stockholders?compensation based on the value of the stockstock option plansthreat of a proxy fightthreat of con

44、version to a partnershipI and II onlyII and III onlyI, II and III onlyI and III onlyI, II, III, and IVDifficulty level: Medium Topic: AGENCY PROBLEM Type: CONCEPTSWhich form of business structure faces the greatest agency problems?sole proprietorshipgeneral partnershiplimited partnershipcorporationl

45、imited liability companyA proxy fight occurs when:the board solicits renewal of current members.a group solicits proxies to replace the board of directors.a competitor offers to sell their ownership in the firm.the firm files for bankruptcy.the firm is declared insolvent.Which one of the following p

46、arties is considered a stakeholder of a firm?A employeeshort-term creditorlong-term creditorpreferred stockholdercommon stockholderDifficulty level: EasyTopic: STAKEHOLDERSType: CONCEPTSWhich of the following are key requirements of the Sarbanes-Oxley Act?Officers of the corporation must review and

47、sign annual reports. Officers of the corporation must now own more than 5% of the firms stock.I. Annual reports must list deficiencies in internal controls. Annual reports must be filed with the SEC within 30 days of year end.I onlyII onlyI and III onlyII and III onlyII and IV onlyDifficulty level:

48、MediumTopic: SARBANES-OXLEYType: CONCEPTSInsider trading is:legal.illegal.impossible to have in our efficient market.discouraged, but legal.list only the securities of the largest firms.Sole proprietorships are predominantly started because: A. they are easily and cheaply setup.the proprietorship li

49、fe is limited to the business owners life.all business taxes are paid as individual tax.All of the above.None of the above.Difficulty level: EasyTopic: SOLE PROPRIETORSHIPSType: CONCEPTSManagers are encouraged to act in shareholders interests by:shareholder election of a board of directors who select management.the threat of a takeover by another pensation