FIN 419 Week 5 DQ 3 of 4

 This document of FIN 419 Final Exam includes answers to the next questions:


 1. The sole proprietor has unlimited liability; his or her total investment in the business, but not his or her personal assets, can be taken to satisfy creditors.

 2. Time-value of money is based on the belief that a dollar that will be received at some future date is worth more than a dollar today.

 3. Holders of equity have claims on both income and assets that are secondary to the claims of creditors.

 4. The possibility that the issuer of a bond will not pay the contractual interest or principal payments as scheduled is called maturity risk.

 5. The breakeven point in dollars can be computed by dividing the contribution margin into the fixed operating costs.

Business - Finance
 1.  A financial analyst is responsible for maintaining and controlling the firm's daily cash balances. Frequently manages the firm's short-term investments and coordinates short-term borrowing and banking relationships.

 2.  In partnerships, owners have unlimited liability and may have to cover debts of other less financially sound partners.

 3.  In partnerships, a partner can readily transfer his/her wealth to other partners.

 4.  The board of directors is responsible for managing day-to-day operations and carrying out the policies established by the chief executive officer.

 5.  The president or chief executive officer is elected by the firm's stockholders and has ultimate authority to guide corporate affairs and make general policy.

 6.  In limited liability partnerships, the liability protection does not protect partners from their own individual acts of malpractice.

 7.  In limited liability partnership, all partners have limited liability with regard to the business, they are not personally liable for other partners' malpractice, and the limited liability partnership is taxed as partnership.

 8.  Managerial finance

 9.  Finance can be defined as

 10.  The true owner(s) of the corporation is (are) the _____C___.

 11.  High cash flow is generally associated with a higher share price whereas higher risk tends to result in a lower share price.

 12.  Managing the firm's assets includes all of the following EXCEPT

 13.  Managing the firm's liabilities includes all of the following EXCEPT

 14.  High earnings per share (EPS) does not necessarily translate into a high stock price.

 15.  The agency problem occurs when the firm selects an ineffective marketing advertising and PR firm to represent them.

 16.  The major purpose of the Sarbanes-Oxley Act of 2002 was to place caps on the compensation that could be paid to corporate executives.

 17.  Corporate owner's receive realizable return through

 18.  As the risk of a stock investment increases, investors'

 19.  The Sarbanes-Oxley Act of 2002 was passed in response to

 20.  The Sarbanes-Oxley Act of 2002 did all of the following EXCEPT

 21.  A public offering is the sale of a new security issue, typically debt or preferred stock, directly to an investor or group of investors.

 22.  A competitive market that allocates funds to their most productive use is called a(n)

 23.  A downward-sloping yield curve indicates generally cheaper short-term borrowing costs than long-term borrowing costs. True

 24.  If a bond pays $1,000 plus interest at maturity, $1,000 is called the

 25.  High-quality (high

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