Homework answers / question archive / University of New Haven FINC 2213 Chapter 1 1)CFO’s do all of the following except: a

University of New Haven FINC 2213 Chapter 1 1)CFO’s do all of the following except: a

Accounting

Share With

---

University of New Haven

FINC 2213

Chapter 1

1)CFO’s do all of the following except:

a.            Oversee operations.

b.            Report to the CEO.

c.             Verify adequacy of accounting systems to meet corporate needs.

d.            Are responsible for issuing stocks and bonds for their companies.

e.            Review all major corporate initiatives requiring financial outlays.

2.            Which of the following statements is INCORRECT for companies practicing conscious capitalism?

a.            The environment is considered a stakeholder of the business.

b.            Families of employees are not considered stakeholders of the firm.

c.             A major objective is to create win-win situations for all the stakeholders of the firm.

d.            The business is viewed as a dynamic ecosystem.

e.            Creating value for the firm is expected to result in a higher stock price.

3.            Finance departments evaluate projects and determine which ones should proceed. Which of the following is least likely to get funded?

 

a.            The IRS has mandated a change in the calculation of payroll tax deductions.

b.            There is a bug in the billing computer system that has been undercharging clients.

c.             R&D needs more money to commercialize the manufacture of an extraordinary breakthrough technology.

d.            HR is looking for funds for a smoking cessation program.

e.            The state insurance commissioner is requiring an upgrade to a billing program.

 

4.            Which of the following statements is false?

 

a.            If one partner of a partnership becomes very ill with large medical bills and can’t pay his share of the business debts, the other partner must assume the additional debt burden.

b.            Transfer of ownership in a large public corporation can be very difficult.

c.             The owner of a sole proprietorship could lose his house if the business is unsuccessful.

d.            Corporations exist as a legal entity apart from their owners and management team.

e.            Start up costs for a proprietorship are quite small.

5.            Which of the following represents an example of corporate social responsibility?

 

a.            A mining company spends 5% of its income to help people impacted by a new mine near their village.

b.            Congress passes the Sarbanes Oxley bill.

c.             A large company mails a check to the IRS to pay its tax liabilities.

d.            A pharmaceutical company withdraws a drug from the market when asked to by the FDA.

e.            A technology firm pays its legal fines when ordered to so by the court.

6.            The value or market capitalization of a company is given by:

 

a.            The market price of a share of stock times the number of shares traded in the past year.

b.            The market price of a share of stock times the number of shares outstanding.

c.             The market price divided by the number of shares outstanding.

d.            The average market price for the year times the number of shares outstanding.

e.            The number of shares outstanding divided by the market price.

7.            Mario’s seven pizza restaurants are doing well and he has decided to incorporate his business and expand regionally. Changing his business from a sole proprietorship to a corporation will do all of the following except:

 

a.            Secure his personal assets.

b.            Facilitate transfer of ownership in the business.

c.             Enable him to offer stock to his employees as an incentive.

d.            Reduce his tax bill.

e.            Make it easier for him to borrow money.

8.            According to the Jay Adelson videos, which of the following statements is INCORRECT?

a.            The chief marketing officer (CMO) handles all outside communications for a firm.

b.            The chief financial officer (CFO) is responsible for managing the books and raising money for a firm. This role is sometimes outsourced.

c.             Experienced directors are typically hired to be chiefs.

d.            The chief exective officer is responsible for running a business but can be fired by the board of directors.

e.            Any chief in a business should be capable of representing the business to outsiders.

9P. Mario and Angelo co-own a popular Italian restaurant. Their operating income for last year was $153,000.

Both are in the 25% income tax bracket. What was Mario’s tax liability for last year?

$19,125

10P. Just Blooms Flower Shops are a chain organized as a corporation. Last year its operating income was $ 4,326,700. Its corporate tax rate is 33%. If it plans to distribute 25% of its net income as dividends to its shareholders, how much money will be paid out as dividends? dollar?

 

$724,722.25

11P. Emerald Industries had 4,100,000 shares of stock outstanding when the price was $21.75 per share. They issued 750,000 new shares this past year. The stock is now trading at $25.72 per share. What is the current market capitalization of Emerald Industries?

$124,742,000

 

12P. Pine Cone Limited had 6,500,000 shares outstanding at a price of $ 30.75 per share last year. They bought back 1,500,000 shares of their stock this year. The stock is now trading at $ 34.75 per share. What is the current market capitalization of Pine Cone Limited?

$ 173,750,000

13.          Which of the following stattements is INCORRECT?

a.            The relatively new field of behavioral finance explores the psychology behind investing decisions.

b.            Many jobs in finance also require a good understanding of accounting.

c.             Any sole proprietorship started in Connecticut that hires employees must obtain an employer identification number (EIN).

d.            The Federal Reserve is a government owned organization.

e.            A difficulty for a sole proprietorship is that his or her personal assets must be used to pay business debts if the business has insufficient funds to cover them.

14.          Which of the following statements is INCORRECT?

a.            A corporation often has to decide whether to buy or build a new factory.

b.            Firms that launch a new project often need to decide whether to issue stock or bonds to pay for it.

c.             When considering the numbers of the different types of business organizations in the U.S., corporations are the dominant type of business organization.

d.            Issues with stock trading would likely be referred to the SEC.

e.            A significant consideration when studying investments is how to assemble a portfolio.

15.          Which of the following statements is INCORRECT?

a.            Ethical failures led to the collapse of Enron.

b.            The costs of implementing the Sarbanes Oxley Bill requirements pushed some companies to list abroad instead of in the U.S.

c.             An unintended consequence of the Sarbanes Oxley Bill was that some public companies went private because private companies do not need to comply with this bill.

d.            CFO’s are responsible for raising the needed capital for a firm.

e.            A manager can never hold both titles of CEO and Chairman of the Board at the same time.

16.          Which of the following statements is INCORRECT?

a.            Apple’s iPhone has made it easier for consumers to call one another and thus has created value for the consumer and also in turn for the company itself.

b.            Consumers are not generally required or forced to buy the services or products of a business, but do so by choice. This concept is called voluntary exchange.

c.             Feminine values are impacting businesses more and more in modern times.

d.            Microfinance loans have transformed the lives of many in third world countries, enabling them to start their own businesses and lift themselves out of poverty.

e.            Customers are no more smarter today than they were 20 years ago.

17.          Which of the following statements is INCORRECT?

a.            Stakeholder integration means that win-win situations are created for all parties.

 

b.            Defining a higher purpose for a business is a cornerstone of conscious capitalism.

c.             A conscious business culture means that all parties are treated fairly and equitably.

d.            Conscious leadership means maximizing the stock price as a primary objective of the firm.

e.            Conscious leadership views a business as a highly integrated ecosystem.

18.          Which of the following statements is INCORRECT?

a.            A criticism of business today is that it is elevating the few at the expense of the many as exemplified by salaries of senior mangement compared to the average worker.

b.            The most successful businesses today understand trends and capitalize on them.

c.             Businesses today need to monitor and respond to social media carefully because bad reviews or experiences can be quickly shared with many consumers.

d.            Businesses have done more to lift people out of poverty over the last century than any other institution.

e.            Capitalism is defined by government control of businesses.

19.          Which of the following statements is INCORRECT?

a.            Corporate Social Responsibility creates goodwill for a company which tends to lead to increased sales and a higher stock price.

b.            Too many businesses today are emphasizing short term profits to satisfy investor demands.

c.             To succeed over the long term businesses need to invest in themselves to develop new products and services.

d.            Stocks, bonds, stamp collections and real estate are all highly liquid.

e.            Investors prefer stocks that are low risk with good growth potential.

20.          Which of the following statements is INCORRECT?

a.            Creative destruction for a company means that it develops a new product that is so much better than an old one that it makes the old one obsolete.

b.            An example of a paradigm shift was the developmnet of the digital camera that replaced the older film based camera.

c.             Management decisions for a firm can make or break its stock price.

d.            A general partner in a limited partnership has limited liability for the business as do the limited partners.

e.            Unethical practices to adjust financial statements are sometimes referred to as “window dressing”.