Site MapHelpFeedbackMultiple Choice Quiz
Multiple Choice Quiz
(See related pages)



1

Generally, a corporation is owned by its:
A)Managers
B)Board of Directors
C)Shareholders
D)All of the above.
2

Limited liability is an important feature of:
A)Sole proprietorships
B)Partnerships
C)Corporations
D)All of the above
3

The following are examples of real assets except:
A)Machinery
B)Common stock
C)Office buildings
D)Patents
4

A firm's investment decision is also called the:
A)Financing decision
B)Capital budgeting decision
C)Liquidity decision
D)None of the above
5

The treasurer usually oversees the following functions of a corporation except:
A)Preparation of financial statements
B)Investor relationships
C)Cash management
D)Obtaining finances
6

The treasurer is usually responsible the following functions of a corporation except:
A)Raising new capital
B)Cash management
C)Banking relationships
D)Internal accounting
7

The following are advantages of separation of ownership and management of corporations except:
A)Corporations can exist forever.
B)Facilitate transfer of ownership without affecting the operations of the firm.
C)Hire professional managers
D)Incur agency costs
8

The financial goal of a corporation is to:
A)Maximize sales
B)Maximize profits
C)Maximize the value of the firm to the shareholders
D)Maximize managers' benefits
9

Agency costs are:
A)Costs incurred resulting in conflicts of interest between the shareholders and the managers of a corporation.
B)Costs of monitoring the managers' actions
C)Both A and B
D)None of the above
10

According to the complex web of contracts (nexus of contracts) approach, written contracts are always:
A)Complete and absolute
B)Incomplete
C)Supplemented by understandings
D)B and C
11

Financial institutions facilitate individuals and firms in:
A)Borrowing
B)Lending
C)Pooling of risks
D)All of the above
12

Generally, a corporation is owned by its shareholders.
A)True
B)False
13

The main disadvantage of organizing as a corporation in the United States is:
A)limited liability
B)permanent life
C)double taxation
D)unlimited liability
14

The financial goal of a corporation is to:
A)Maximize sales
B)Maximize profits
C)Maximize the value of the firm to the shareholders
D)Maximize managers' benefits
15

Agency costs are:
A)Costs incurred resulting in conflicts of interest between the shareholders and the managers of a corporation.
B)Costs of monitoring the managers' actions
C)Both A and B
D)None of the above





To learn more about the book this website supports, please visit its Information Center.
(c)2003 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Policy.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.


Principles of Corporate FinancOnline Learning Center with Powerweb

Home > Chapter 1 > Multiple Choice Quiz