Fichas
Chapter 1 Cue Cards
Fichas del conjunto (20)
- 1What is the capital Budgeting decision/Investment DecisionWhat capital investment projects to invest in
- 2What is the decision called to pay for assets in a capital investment project?Financial Decision
- 3Capital Investment projects and paying for assets is determined by the ________ ManagerFinancial Manager
- 4What 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
- 5What are two methods of raising funds?Externally and Internally
- 6Types of External Financing (When deciding called Capital Structure Decision)Debt Financing & Equity Financing
- 7________ Assets are used to produce goods and servicesReal Assets
- 8______ Assets are claims to the income generated by the firms production assetsFinancial
- 9A Corporation is a ________ ________ that allows the owners to have _______ _________Legal Entity, Limited Liability
- 10Shareholders are owners but the corporations are run by employees led by the ______CEO
- 11Separation of ownership and control adds flexibility (True/False)True
- 12A Corporation can Sue and be Sued (T/F)True
- 13Shareholders can sell shares (T/F)True
- 14Corporations are taxed twice (T/F)True
On company profits and in hands of shareholders - 15Name 4 Types of BusinessSole Proprietorship
Partnership (General/Limited)
Hybrid forms (LLP, LLC etc)
Corporation - 16Two people under CFOTreasurer (looks after cash, raising capital etc)
Controller (Financial statements, accounting etc) - 173 Goals of a CorporationShareholders want max market value of corp.
Increase market value to increase shareholder wealth.
Max current share price = main objective - 18Managers are hired as agents of the owners and consider all stakeholders (T/F)True
- 19Agency Problems are when personal goals of agents conflict with roles in corp (T/F)True
- 205 Ways to reduce Agency ProblemsCompensation Plans
Board of Directors
Threat of Takeovers
Specialist Monitoring
Legal and Regulatory Requirements