Finance 379 Midterm Essay

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Question : | (TCO 1) What is the goal of financial management for a sole proprietorship? | | | Student Answer: | | decrease long-term debt to reduce the risk to the owner | | | | maximize net income given the resources of the firm | | | | maximize the market value of the equity | | | | minimize the tax impact on the proprietor | | | | minimize costs and increase production | | Instructor Explanation: | Chapter 1, Page 11 | | | | Points Received: | 3 of 3 | | Comments: | | | | Question 2. | Question : | (TCO 1) Working capital management includes which of the following? | | | Student Answer: | | establishing the inventory level | | | | deciding when to pay suppliers | | | | determining the amount of cash needed on a daily basis | | | | establishing credit terms for customers | | | | all of the above | | Instructor Explanation: | Chapter 1, Page 6, Week 1 Lecture | | | | Points Received: | 3 of 3 | | Comments: | | | | Question 3. | Question : | (TCO 1) Market value is important to the financial manager because: | | | Student Answer: | | It reflects the value of the asset, based on generally-accepted accounting principles. | | | | Is a crucial component of the balance sheet, and can impact the financial statements. | | | | Market value reflects the amount someone is willing to pay today for an asset. | | | | The market value of an asset reflects its historical cost. | | | | None of the above | | Instructor Explanation: | Chapter 2, Page 26 | | | | Points Received: | 0 of 3 | | Comments: | Chapter 2, Page 26 Market value reflects the amount someone is willing to pay today for an asset. | | | Question 4. | Question : | (TCO 1) Which of the following is true regarding income
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