Quiz 1 Building Wealth

6 Questions | Total Attempts: 52

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Building Quizzes & Trivia

Questions and Answers
  • 1. 
    The decision function of financial management can be broken down into the decisions.
    • A. 

      Financing and investment

    • B. 

      Investment, financing, and asset management

    • C. 

      Financing and dividend

    • D. 

      Capital budgeting, cash management, and credit management

  • 2. 
    The controller's responsibilities are primarily in nature, while the treasurer's responsibilities are primarily related to .
    • A. 

      Operational; financial management

    • B. 

      Financial management; accounting

    • C. 

      Accounting; financial management

    • D. 

      Financial management; operations

  • 3. 
     "Shareholder wealth" in a firm is represented by:
    • A. 

      The number of people employed in the firm.

    • B. 

      The book value of the firm's assets less the book value of its liabilities.

    • C. 

      The amount of salary paid to its employees.

    • D. 

      The market price per share of the firm's common stock.

  • 4. 
    The long-run objective of financial management is to:
    • A. 

      Maximize earnings per share.

    • B. 

      Maximize the value of the firm's common stock.

    • C. 

      Maximize return on investment.

    • D. 

      Maximize market share.

  • 5. 
    A(n) would be an example of a principal, while a(n) would be an example of an agent.
    • A. 

      Shareholder; manager

    • B. 

      Manager; owner

    • C. 

      Accountant; bondholder

    • D. 

      Shareholder; bondholder

  • 6. 
    The focal point of financial management in a firm is:
    • A. 

      The number and types of products or services provided by the firm.

    • B. 

      The minimization of the amount of taxes paid by the firm.

    • C. 

      The creation of value for shareholders.

    • D. 

      The dollars profits earned by the firm.

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