text bank Fin 202 chap 1

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Format:  True/False
Learning Objective:  LO 1
Level of Difficulty:  Easy
1.
The financial manager is responsible for making decisions that are in the best interest of the firm's owners. A)
True
B)
False
Ans:
A

Format:  True/False
Learning Objective:  LO 1
Level of Difficulty:  Easy
2.
The demand for a potential business product, as well as the identification of what product or services is to be produced, are both contained in a business plan. A)
True
B)
False
Ans:
A

Format:  True/False
Learning Objective:  LO 1
Level of Difficulty:  Easy
3.
The local Republican Party is a stakeholder in a local firm that makes no political donations to either party. A)
True
B)
False
Ans:
B

Format:  True/False
Learning Objective:  LO 1
Level of Difficulty:  Easy
4.
A patent is a productive asset for a technology-based firm.
A)
True
B)
False
Ans:
A

Format:  True/False
Learning Objective:  LO 1
Level of Difficulty:  Medium

5.
Intangible assets generate most of a manufacturing firm's cash flows. A)
True
B)
False
Ans:
B

Format:  True/False
Learning Objective:  LO 1
Level of Difficulty:  Easy
6.
The most fundamental way that a business can grow in size is from the reinvestment of cash flows or earnings. A)
True
B)
False
Ans:
A

Format:  True/False
Learning Objective:  LO 1
Level of Difficulty:  Medium
7.
When bankruptcy occurs, the firm will always be liquidated.
A)
True
B)
False
Ans:
B

Format:  True/False
Learning Objective:  LO 1
Level of Difficulty:  Medium
8.
Capital assets are generally short term in nature.
A)
True
B)
False
Ans:
B

Format:  True/False
Learning Objective:  LO 1
Level of Difficulty:  Medium
9.
A good capital budgeting decision is one in which the benefits are worth more to the firm than the cost of the asset. A)
True
B)
False
Ans:
A

Format:  True/False
Learning Objective:  LO 1
Level of Difficulty:  Medium
10.
The financing decision determines how firms raise cash to pay for their investments. A)
True
B)
False
Ans:
A

Format:  True/False
Learning Objective:  LO 1
Level of Difficulty:  Easy

11.
The dollar difference between current assets and total liabilities is called working capital. A)
True
B)
False
Ans:
B

Format:  True/False
Learning Objective:  LO 2
Level of Difficulty:  Easy
12.
A sole proprietorship is an owner's only business.
A)
True
B)
False
Ans:
B

Format:  True/False
Learning Objective:  LO 2
Level of Difficulty:  Medium
13.
The greatest number of businesses in the United States are corporations. A)
True
B)
False
Ans:
B

Format:  True/False
Learning Objective:  LO 2
Level of Difficulty:  Medium
14.
Unlimited liability means that the owner of a firm is responsible for paying all the firm's bills. A)
True
B)
False
Ans:
A

Format:  True/False
Learning Objective:  LO 2
Level of Difficulty:  Medium
15.
The process of transferring ownership of a sole proprietorship is relatively easy. A)
True
B)
False
Ans:
B

Format:  True/False
Learning Objective:  LO 2
Level of Difficulty:  Medium
16.
General partners in a business have limited liability with regard to their firm's obligations. A)
True
B)
False
Ans:
B

Format:  True/False
Learning Objective:  LO 2
Level of Difficulty:  Medium
17.
Most large corporations are incorporated in New York because of its favorable tax treatment of corporate income and its statutes protecting the rights of its owners. A)
True
B)
False
Ans:
B

Format:  True/False
Learning Objective:  LO 2
Level of Difficulty:  Easy
18.
Corporations do not have their income subject to double taxation. A)
True
B)
False
Ans:
B

Format:  True/False
Learning Objective:  LO 2
Level of Difficulty:  Easy
19.
Privately held corporations are allowed to have shareholders. A)
True
B)
False
Ans:
A

Format:  True/False...
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