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37 Cards in this Set
- Front
- Back
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Making good investment and financing decisions is the chief task of the ______ ______
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financial manager
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The _______ decision is usually referred to as the capital budgeting decision
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investment
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The _____ ______ _____ is the decision to invest in tangible or intangible assets (real or financial)
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capital budgeting decisions
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____ assets - assets used to produce goods and services
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real
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_____ assets-financial claims to the income gererated by the firm's real assets
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financial
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_____ _____ helps the firm to invest in projects that are worth more than they cost
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financial manager
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____ _______ - the form and amount of financing of a firm's investments
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Financing decision
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______ - business organized as a separte legal entity owned by STOCKHOLDERS
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Corporation
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T/F - owner's liability is unlimited in corporations
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FALSE - LIMITIED (unlimited in sole and partnerships)
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T/F - Owner and business taxed separately in Coprations
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TRUE - (NOT taxed separately in sole and partnerships)
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T/F - stockholders are more inclined to invest in risker asset ventures to create VALUE
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True
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______ vote for the board of directors in a corporation
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Stockhodlers
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___ - oversees the treaurer and controller and sets overall financial strategy
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CFO
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______ - responsible for financing, cash management, and relationships with banks and other financial institutions
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Treasurer
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______ - responsible for budgeting, accounting, and taxes
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Controller
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goal of corporations
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maximize shareholders wealth, maximize market value of the firm
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_____ ___ - managers, acting as agents for stockholders, may act in their own interests rather than maximizing value
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Agency Problem
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What phrase describes the process of raising money for investment purposes?
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Financing
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_____ ______ decisions - long term financing decisions
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Capital Structure
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____ _____ decisions - long term investment decisions
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Capital Budgeting
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T/F - controller is likely to be only financial executive in small firms
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FALSE - TREASURER is likely to be only financial executive in small firms
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______ - responsible for investing the firm's spare cash and arranging any issue of common stock
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Treasurer
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Who is in charge of tax matters?
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Controller
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T/F - Raising Market share is NOT a goal in itself
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True - maximizing value of investment in firm
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Financial markets and intermediaries bring ___ and _____ together
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Savers and Investors
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______ ________ facilitate the flow of money between firms and investors (market where securities are issued and traded)
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financial markets
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______ ______ - market for the sale of new securities by corporations
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Primary Market
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______ _______ - market in which previously issued securites are traded amongst investors
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Secondary Market
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T/F - New funds are raised by the firm in the secondary martker
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FALSE - NO NEW FUNDS
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_____ market - dealers trade invetories of securites held
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OTC
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_____ fund - investment plan set up by an employer to provide for employee's retirement
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Pension
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_____ fund - an investment company that pools the savings of many investors and invests in a portfolio of securites
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Mutual
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The minimum acceptable rate of return on capital investment is called the _______ ______ __ _____
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opportunity cost of capital
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The ultimate source of financing is _______ savings
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individuals'
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Mutual funds, pension funds, financial institutions(banks and insurance)
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Intermediaries
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Returns on _____ investmens are NOT TAXED until withdrawn from the plan
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Pension
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Mutual and penison funds allow investors to _____ in professionally managed portfolios
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DIVERSIFY
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