1. What should be the goal of the financial manager of a corporation? Why?

2. If the corporate form of business organization has so many advantages over the corporate form, why is it so common for small businesses to initially be formed as sole proprietorships?

3. One thing lender sometimes require when lending money to a small corporation is an assignment of the common stock as collateral on the loan. Then, if the business fails to repay its loan, the ownership of the stock certificates can be transferred directly to the lender. Why might a lender want such an assignment? What advantage of the corporate form of organization comes into play here?

4. Burlington Exterminators Inc. has sales of $734,000, costs of $315,000, depreciation expense of $48,000, interest expense of $35,000, a tax rate of 35 percent and paid out $85,000 in cash dividends. The common stock outstanding is 110,000 shares. Calculate Statement of Comprehensive Income for the company.

5. Carman Inc. has net working capital of $2,710, current liabilities of $3,950 and inventory of $3,420. Calculate Current Asset Ratio and Quick Ratio.