Corporate Finance Quiz 1


17 questions

Show Answers
See Preview
  • 1. Multiple Choice
    1 minute
    1 pt

    Which of the following best describes why the Valuation Principle is a key concept in making financial decisions?

    It shows how to assign monetary value to intangibles such as good health and well-being.

    It allows fixed assets and liquid assets to be valued correctly.

    It gives a good indication of the net worth of a person, item, or company and can be used to estimate any changes in that net worth.

    It shows how to make the costs and benefits of a decision comparable so that we can weigh them properly.

  • 2. Multiple Choice
    1 minute
    1 pt

    Joe is a general partner in a limited partnership firm, while Jane is a limited partner in the same firm. Which of the following statements regarding their respective relationships to the firm is correct?

    Joe has no management authority within the partnership.

    Jane is legally involved in the managerial decision making of the firm.

    Jane's liability for the firm's debts consists solely of her investment in the firm.

    Withdrawal of Jane from the partnership will dissolve the partnership.

  • 3. Multiple Choice
    1 minute
    1 pt

    What is the major advantage corporations have over other business entities?

    It is easier for a corporation to raise capital than other forms of businesses.

    A corporation is treated as a separate legal entity for tax and legal purposes.

    A corporation's shares can be freely traded among its shareholders.

    All of the above are advantages that a corporation has over other business forms.

  • Answer choices
    Answer choices

    Explore all questions with a free account

    Already have an account?