Financial Management Principles and Applications 8th Edition By Sheridan Titman test bank

Answer: B
Limited partners may actively manage the business.
True
False
Difficulty: Basic
AACSB: 6. Reflective thinking
Learning Objective: 1.2 Identify the key differences between the three major legal forms of business
Answer: B
The life of a corporation is not dependent upon the status of the investors.
True
False
Difficulty: Basic
AACSB: 6. Reflective thinking
Learning Objective: 1.2 Identify the key differences between the three major legal forms of business
Answer: A
If a limited partner dies or leaves the business, the partnership is dissolved and a new partnership must be formed.
True
False
Difficulty: Basic
AACSB: 6. Reflective thinking
Learning Objective: 1.2 Identify the key differences between the three major legal forms of business
Answer: B
In a sole proprietorship, the owner is personally responsible without limitation for the liabilities incurred.
True
False
Difficulty: Basic
AACSB: 6. Reflective thinking
Learning Objective: 1.2 Identify the key differences between the three major legal forms of business
Answer: A
In a limited partnership, at least one general partner must remain in the association; the privilege of limited liability still applies to this partner.
True
False
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.2 Identify the key differences between the three major legal forms of business
Answer: B
Essay: Write your answer in the space provided or on a separate sheet of paper
Compare and contrast the duties of a corporate Treasurer and a Financial Controller.
Difficulty: Complex
AACSB: 6. Reflective thinking
Learning Objective: 1.2 Identify the key differences between the three major legal forms of business
Answer: Both typically serve under the firm’s Chief Financial Officer (CFO); however, in a small firm, the same person may fulfil both roles. The Treasurer handles financing activities such as managing its cash and credit, exercising control over the firm’s major spending, decisions, raising money, developing financial plans and managing any foreign currency the firm receives. The firm’s Financial Controller is responsible for managing the firm’s accounting duties, which include producing financial statements, paying tax and gathering and monitoring data that the firm’s executives need to oversee its financial well-being.
 Multiple choice: Choose the one alternative that best completes the statement or answers the question
Which of the following is central to all five priorities at Woolworths Ltd?
Shareholders
Strategy
Culture
Customers
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.3 Understand the role of the financial manager within the firm and the goal for making financial choices
Answer: D
The authors believe that [blank].
most businesses act out of greed to get rich quickly
successful companies must choose between maximising return to shareholders and looking after the interests of their customers
maximising the wealth of shareholders and doing the right thing for other stakeholders in the company go hand in hand
companies that achieve their goals have competing objectives
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.3 Understand the role of the financial manager within the firm and the goal for making financial choices
Answer: C
Managing funding for the company’s day-to-day operations is known as [blank].
capital budgeting decisions
working capital management
capital structure decisions
generating sustainable portfolios
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.3 Understand the role of the financial manager within the firm and the goal for making financial choices
Answer: B
Business dealings between people and firms ultimately depend on the [blank].
willingness of parties to trust one another
perfectly crafted contract
ability of all parties to not make errors
maximising wealth of shareholders
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.3 Understand the role of the financial manager within the firm and the goal for making financial choices
Answer: A
Profit maximisation is not an adequate goal of the firm when making financial decisions because [blank].
 it reflects shareholder wealth maximisation
 it reflects the risk inherent in different projects that will generate the profits
 it ignores the timing of a project’s returns
 it minimises the share price
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.3 Understand the role of the financial manager within the firm and the goal for making financial choices