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Multiple choice questions

Try the multiple choice questions below to test your knowledge of Chapter 1. Once you have completed the test, click on 'Submit Answers for Grading' to get your results.

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This activity contains 21 questions.

Question 1.
__________ is concerned with the acquisition, financing, and management of assets with some overall goal in mind.


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Question 2.
Jensen and Meckling showed that __________ can assure themselves that the __________ will make optimal decisions only if appropriate incentives are given and only if the __________ are monitored.


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Question 3.
__________ is concerned with the maximization of a firm's earnings after taxes.


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Question 4.
What is the most appropriate goal of the firm?


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End of Question 4


Question 5.
Which of the following statements is correct regarding profit maximization as the primary goal of the firm?


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Question 6.
__________ is concerned with the branch of economics relating the behavior of principals and their agents.


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Question 7.
A concept that implies that the firm should consider issues such as protecting the consumer, paying fair wages, maintaining fair hiring practices, supporting education, and considering environmental issues.


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Question 8.
Which of the following is not normally a responsibility of the treasurer of the modern corporation but rather the controller?


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Question 9.
The __________ decision involves determining the appropriate make-up of the right-hand side of the balance sheet.


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Question 10.
To whom does the Treasurer most likely report?


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Question 11.

The authors of your textbook suggest that you need to understand financial management even if you have no intention of becoming a financial manager. One reason is that the successful manager of the not-too-distant future will need to be much more of a __________ who has the knowledge and ability to move not just vertically within an organization but horizontally as well. Developing __________ will be the rule, not the exception.

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Question 12.
The __________ decision involves a determination of the total amount of assets needed, the composition of the assets, and whether any assets need to be reduced, eliminated, or replaced.


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Question 13.
How are earnings per share calculated?


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Question 14.
According to the text's authors, what is the most important of the three financial management decisions?


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Question 15.
The __________ decision involves efficiently managing the assets on the balance sheet on a day-to-day basis, especially current assets.


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Question 16.
Which of the following is not a perquisite (perk)?


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Question 17.
Which of the following is not normally a responsibility of the controller of the modern corporation?


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Question 18.
All constituencies with a stake in the fortunes of the company are known as __________.


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Question 19.
Which of the following statements is not correct regarding earnings per share (EPS) maximization as the primary goal of the firm?


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Question 20.
__________ is concerned with the maximization of a firm's stock price.


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Question 21.
Corporate governance success includes three key groups. Which of the following represents these three groups?


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