Question
1.Which of the following is a strength of the corporate form of business? A. Limited life of the business B. Unlimited access to capital C.
1.Which of the following is a strength of the corporate form of business?
A. Limited life of the business
B. Unlimited access to capital
C. Unlimited liability
D. Double taxation of income
2. What is meant by the term double taxation as applied to the corporate form of business organization?
a) Corporate income as taxed at twice the rate of partnership income.
b) Corporate income is taxed, and then corporate dividends are taxed as well.
c) Corporations pay both Federal income tax and state income tax on their earnings.
d) Corporations pay both income tax and sales on their goods.
3. What is the goal of financial management?
a) maximize corporate profits
b) maximize shareholder wealth
c) minimize costs
d) maximize earnings
4. What ratio measures the ability of the firm to satisfy its short term obligations as they come due?
a) activity ratio
b) times interest earned ratio
c) current ratio
d) inventory turnover ratio
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