Deck 5: Introduction to Financial Management

Question 1

The choices that individuals and organizations make regarding financial management are influenced by which of the following?

A) Demand
B) Scarcity
C) Price
D) Only a and c are correct
E) All three-a, b, and c-are correct

Answer 1

E

Question 2

When sport leagues do not expand into a market that can support a franchise, or when they create rules to limit the movement of existing franchises, which of the following economic concepts is being applied?

A) Demand
B) Scarcity
C) Price
D) Equilibrium
E) None of the above

Answer 2

B

Question 3

When the citizens of Hamilton County, Ohio, decided to raise their taxes to fund two new sports stadiums rather than to raise taxes for something like improving the educational system in the county, they missed a chance to improve the educational system. What is this known as?

A) A marginal cost
B) A fixed cost
C) A variable cost
D) An opportunity cost
E) None of the above

Answer 3

D

Question 4

The vast majority of for-profit businesses in the United States operate as which of the following?

A) Sole proprietorships
B) General partnerships
C) Subchapter S corporations
D) Limited liability corporations
E) C corporations

Question 5

The major disadvantages of forming a business under a _____ structure is that there is double taxation of profits, and the cost of forming the business and operating the business is higher than other structures.

A) Sole proprietorships
B) General partnerships
C) Subchapter S corporations
D) Limited liability corporations
E) C corporations

Question 6

Which of the following is the depreciation method that is most aggressive at allocating loss of useful life to the early years of the asset's use?

A) Straight-line
B) Sum-of-years digits, decelerating deprecation
C) Sum-of-years digits, accelerating depreciation
D) Double-declining balance
E) Units of production

Question 7

Which of the following methods of depreciation attempts to take the non-linear loss of a fixed asset's value into account, with depreciation occurring quickly after purchase? Using this method, the denominator for a fixed asset with a useful life of five years is 15.

A) Straight-line
B) Sum-of-years digits, decelerating deprecation
C) Sum-of-years digits, accelerating depreciation
D) Double-declining balance
E) Units of production

Question 8

Which of the following methods of depreciation attempts to take the non-linear loss of a fixed asset's value into account with depreciation occurring late after purchase? Using this method, the denominator for a fixed asset with a useful life of five years is 15.

A) Straight-line
B) Sum-of-years digits, decelerating deprecation
C) Sum-of-years digits, accelerating depreciation
D) Double-declining balance
E) Units of production

Question 9

An example of a microeconomic decision that a financial manager might make would be deciding whether to pay for training for current employees to learn new job processes.

Question 10

Accounting profit is the profit remaining after the opportunity costs associated with a financial decision are included.

Question 11

In the sport industry, high school and collegiate athletic departments at public schools are ultimately operated by the government.

Question 12

The Minnesota Vikings are an example of a community-owned entity in the NFL.

Question 13

In 2015, the National Football League elected to become a non-profit organization.

Question 14

In an S corp, profits flow through the business to the shareholders and are taxed only once, as ordinary income to the shareholders.

Question 15

One advantage of a C corp is that there can be an unlimited number of investors.

Question 16

The rate at which banks may borrow money from the Federal Reserve is the federal funds rate.

Question 17

M1 measures liquid assets like cash, checking and savings accounts, and CDs.

Question 18

The double-declining balance depreciation method aggressively allocates loss of useful life to the early years of an asset's use.