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Concept Review Questions
(See related pages)

  1. What is meant by limited liability? Do corporations have limited liability? What about sole proprietorships? (page 6 of the book)
  2. There is an important tax drawback in the United States to organizing as a corporation. What is it? (page 6 of the book)
  3. Firms invest real assets and finance them by selling financial assets. Give some examples of each. (page 6 of the book)
  4. Explain the difference between the roles of the treasurer and financial controller. (pages 8-9 of the book)
  5. Conflicts between shareholders and managers create agency costs. What are agency costs and when are they incurred? (page 10 of the book)





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