Assignment 1 Essay

439 WordsOct 10, 20122 Pages
Assignment 01 BU340 Managerial Finance I Directions: Be sure to make an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use correct English spelling and grammar. Sources must be cited in APA format. Your response should be a minimum of one (1) single-spaced page to a maximum of two (2) pages in length; refer to the "Assignment Format" page for specific format requirements. 1. What form of partnership allows some of the investors to limit their liability? Explain by giving examples. (25 points) A limited partnership allows some of the investors to limit their liability. Under these terms, one or more partners are designated general partners and have unlimited liability for the debts of the firm; others contributors are designated limited partners and are liable only for their initial contribution. For example, if partner A and B contribute and of the capital respectively, limited partnership dictates that partner A is liable for only the initial contribution. 2. When does insider trading occur? What government agency is responsible for protecting against the unethical practice of insider trading? Explain by giving examples. (25 points) Insider trading occurs when a person has information that is not available to the public and then uses this to profit from trading in company’s publicly traded securities. This is an illegal practice and protected by the government agency called (SEC) Securities and Exchange Commission. For instance, if Company A’s CEO didn’t trade on the undisclosed takeover news, but instead passed the information on to his relative who traded on it, illegal insider trading is present if such actions were act upon. 3. Explain how the tax code allows depreciation to contribute to cash flow. (25 points) Depreciation is

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