Quiz 1 Building Wealth
- 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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