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    Management Study Questions

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    1. What are the two basic sources of funds for all businesses?
    Question 1 options:

    Debt

    Equity

    Both debt and equity

    None of the above

    Question 2 (1 point)
    True or False
    Working capital management is the management of current assets, such as inventory, and current liabilities, such as money owed to suppliers.
    Question 2 options:

    True

    False

    Question 3 (1 point)
    What are the forms of business organization discussed in this chapter?
    Question 3 options:

    Sole Proprietorship

    Partnership

    Corporation

    All of the above

    Question 4 (1 point)
    What is meant by stockholders' limited liability?
    Question 4 options:

    That the stockholder's legal liability extends to all personal assets as well.

    That the stockholder's legal liability extends only to the debt owed.

    That the stockholder's legal liability extends only to the capital contributed or the amount invested.

    None of the above

    Question 5 (1 point)
    What is double taxation?
    Question 5 options:

    The employees of a corporation are subject to double taxation--first when they get their paychecks and then when they pay state and federal income tax.

    The owners of a corporation are subject to double taxation—first at the corporate level and then again at a personal level when they are given dividends.

    The suppliers of a corporation are subject to double taxation—first when the corporation pays their invoices and then again when they have to pay federal taxes.

    None of the above

    Question 6 (1 point)
    What are some of the regulations pertaining to boards of directors that were put in place to reduce agency conflicts?
    Question 6 options:

    The majority of board members must be outsiders.

    A separation of the CEO and chairman of the board positions is recommended.

    The CEO and CFO must certify all financial statements.

    All of the above

    Question 7 (1 point)
    Which one of the following mechanisms helps to align management interests with those of its shareholders?
    Question 7 options:

    A well designed management compensation package

    An efficient managerial labor market

    The Sarbanes-Oxley Act of 2002

    All of the above

    Question 8 (1 point)
    One of the best ways to reduce agency conflict is by
    Question 8 options:

    designing an effective compensation package

    instituting severe penalties for bad decisions

    hiring outside monitors to keep track of the manage's decisions

    having managers report to the board of directors

    Question 9 (1 point)
    Which of the following factors or activities can be controlled by the management of the firm?
    Question 9 options:

    The level of economic activity

    Stock market conditions

    Capital budgeting

    The level of interest rates

    Question 10 (1 point)
    Current Liabilities are liabilities that will be converted to cash within a year
    Question 10 options:

    True

    False

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    https://brainmass.com/business/the-time-value-of-money/management-study-questions-612846

    Solution Preview

    Let's take a look at each of your study questions.

    1. What are the two basic sources of funds for all businesses?
    Question 1 options:
    Debt
    Equity
    Both debt and equity <--- debt and equity are both sources of funds for all businesses, regardless of the type of business entity.
    None of the above

    Question 2 (1 point)
    True or False
    Working capital management is the management of current assets, such as inventory, and current liabilities, such as money owed to suppliers.
    Question 2 options:
    True <---- this is a true statement above. Working capital management includes assets and liabilities.
    False

    Question 3 (1 point)
    What are the forms of business organization discussed in this chapter?
    Question 3 options:
    Sole Proprietorship
    Partnership
    Corporation
    All of the above <---- Without knowing which textbook you are using to study, this is impossible to answer. However, most chapters would include all three of these types of businesses. They are generally discussed as a group with further identification of similarities and differences.

    Question 4 (1 point)
    What is meant by ...

    Solution Summary

    This solution provides the answers and short explanations to the study questions listed.

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