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Chapter 01 - Introduction to Corporate Finance
Chapter 01 Introduction to Corporate Finance Answer Key
Multiple Choice Questions
1. Which one of the following terms is defined as the management of a firm 's long-term investments? A. working capital management B. financial allocation C. agency cost analysis D. capital budgeting E. capital structure Refer to section 1.1
AACSB: N/A Difficulty: Basic Learning Objective: 1-1 Section: 1.1 Topic: Capital budgeting
2. Which one of the following terms is defined as the mixture of a firm 's debt and equity financing? A. working capital management B. cash management C. cost analysis D. capital budgeting E. capital structure Refer to section 1.1
AACSB: N/A
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I, II, III, and IV Refer to section 1.1
AACSB: N/A Difficulty: Basic Learning Objective: 1-1 Section: 1.1 Topic: Financial management
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Chapter 01 - Introduction to Corporate Finance
11. Which one of the following functions should be the responsibility of the controller rather than the treasurer? A. daily cash deposit B. income tax returns C. equipment purchase analysis D. customer credit approval E. payment to a vendor Refer to section 1.1
AACSB: N/A Difficulty: Basic Learning Objective: 1-1 Section: 1.1 Topic: Financial management
12. The controller of a corporation generally reports directly to the: A. board of directors. B. chairman of the board. C. chief executive officer. D. president. E. vice president of finance. Refer to section 1.1
AACSB: N/A Difficulty: Basic Learning Objective: 1-1 Section: 1.1 Topic: Corporate structure
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Chapter 01 - Introduction to Corporate Finance
13. Which one of the following correctly defines the upward chain of command in a typical corporate organizational structure? A. The vice president of finance reports to the chairman of the board. B. The chief executive officer reports to president. C. The controller reports to the president. D. The treasurer reports to the vice president of finance. E. The chief operations officer reports to the vice president of production. Refer to section 1.1
AACSB: N/A Difficulty: Basic Learning
This four-credit course is for students who major in finance. By the end of this course,
Faculty and students/learners will be held responsible for understanding and adhering to all policies contained within the following two documents:
* Management and Control - According to law, day-to-day management of a corporation rests with the officers appointed by the board of directors, who are ultimately responsible for the management of the corporation. The board of directors is elected by the votes of the shareholders.
For this course project, I have chosen Cisco Systems, Inc. and tried to do the DuPont analysis for this company. Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol (IP) based networking products and services related to the communications and information technology industry worldwide. Cisco also provides broad line of products for transporting data, voice, and video within buildings, across campuses, and around the world. Various products offered by Cisco are switching, NGN routing, collaboration portfolio integrating voice, video, data and mobile applications data center and other networking products. Cisco Systems has a market cap of $128.77 billion and is part of the technology sector and
Our organisation structure is tall, this is because we have many different levels of employees all reporting upwards to team leaders and then up to operational management. It has a wide chain of command with a narrow span of control. The chain of command refers to the number of levels within our organisation. The span of control is the number of employees who are directly supervised by one person.
14) __________ may exist at all levels of responsibility, from the individual work unit composed of a team leader and team members to the top management team composed of a CEO and other senior executives.
B. The company has a cash inflow as well as cash outflow for its investing activities. Cash inflow is from the sales of property and equipment while the cash outflow is from payment from capital from property and equipment. The largest item in investing activities was the purchase of property and equipment which resulted in a total of $98.2 million. (F-7)
Isolation Company has a debt–equity ratio of 0.80. Return on assets is 8.0 percent, and total equity is
In a typical corporation there are two divisions, Treasurer’s and Controllers offices that manage the finance function. The Treasurer’s Office is responsible for managing the firm’s cash and credit, its financial planning, and its capital expenditures. The
However, one person acting as accountant, treasurer and controller places an imbalanced access to the companies invoice process, ordering process, check cashing process, and he alone decides what of these activities gets recorded in the Company books. We recommend that two other employees be assigned the respective Treasurer and Controller duties.
The senior staff reports directly to the CEO Eric Carr as shown below. Finance & Accounting is a senior vice president position. All others are vice president positions and they will all be responsible for their respective employees.
The corporation is owned by its stockholders, these stockholders elect a board of directors that oversee the activities of the company. The board of directors appoints officers like a president, vice-president, controller, and treasurer. The
On account of a pyramid, the pioneer or president is at the highest point of the organization, and every single other office course underneath that pioneer. VPs answer to the president or CEO, and thus, executives answer to the VPs. Administrators of divisions are underneath the chiefs and these directors regularly have various managers answering to them. At last, the laborers in a bureaucratic association answer to the bosses. Structure is critical for a bureaucratic organization.
4. What responsibilities do a company’s controller and other accounting employees have when interacting with the firm’s independent auditors? Do these responsibilities conflict with other job-related responsibilities of a company’s accounting employees? Explain.
The advantages to a LLC are: 1) Reduction of personal liability. A sole proprietor has unlimited liability, which can include the potential loss of all personal assets. 2) Taxes. Forming an LLC may mean that more expenses can be considered business expenses and be deducted from the company’s income. 3) Improved credibility. The business may have increased credibility in the business world compared to a sole proprietorship. 4) Ability to attract investment. Corporations, even LLCs, can raise capital through the sale of equity. 5) Continuous life. Sole proprietorships have a limited life,