Chapter 1 Cue Cards

Beschreibung

Test yourself
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Zusammenfassung der Ressource

Frage Antworten
What is the capital Budgeting decision/Investment Decision What capital investment projects to invest in
What is the decision called to pay for assets in a capital investment project? Financial Decision
Capital Investment projects and paying for assets is determined by the ________ Manager Financial Manager
What 3 needs to be considered about benefits of making a decision to invest in a project? (Hint: ATR) Amount of Benefits, Timing of Benefits, Risks associated with Benefits
What are two methods of raising funds? Externally and Internally
Types of External Financing (When deciding called Capital Structure Decision) Debt Financing & Equity Financing
________ Assets are used to produce goods and services Real Assets
______ Assets are claims to the income generated by the firms production assets Financial
A Corporation is a ________ ________ that allows the owners to have _______ _________ Legal Entity, Limited Liability
Shareholders are owners but the corporations are run by employees led by the ______ CEO
Separation of ownership and control adds flexibility (True/False) True
A Corporation can Sue and be Sued (T/F) True
Shareholders can sell shares (T/F) True
Corporations are taxed twice (T/F) True On company profits and in hands of shareholders
Name 4 Types of Business Sole Proprietorship Partnership (General/Limited) Hybrid forms (LLP, LLC etc) Corporation
Two people under CFO Treasurer (looks after cash, raising capital etc) Controller (Financial statements, accounting etc)
3 Goals of a Corporation Shareholders want max market value of corp. Increase market value to increase shareholder wealth. Max current share price = main objective
Managers are hired as agents of the owners and consider all stakeholders (T/F) True
Agency Problems are when personal goals of agents conflict with roles in corp (T/F) True
5 Ways to reduce Agency Problems Compensation Plans Board of Directors Threat of Takeovers Specialist Monitoring Legal and Regulatory Requirements
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