4. Which of the following companies faces the problem of undercapitalization?

Question

A large corporation that has been hit with a major lawsuit because one of its products has a design flaw that has led to serious injuries.
A small new company struggling because it has insufficient start-up funds.
A medium sized company that has decided to buy out a smaller competitor.
An electric utility that has recently experienced a significant increase in the cost of coal and labor.

MY ANSWER B

5. Tiffany's work in the finance department of her firm consists of checking accounting records and financial statements to verify that proper procedures are followed. Tiffany activities are those of a(n):
internal auditor.
comptroller.
CPA.
financial advisor.
MY ANSWER A

6. The managers of Dakota Clothing regularly compare their actual profits with the firm's projected profits. When deviations occur, the managers use the feedback to take corrective action when necessary. The management of Dakota Clothing is exercising financial:
derivatives.
control.
planning.
budgeting.
MY ANSWER C

Answer 1

2. No matter the size of the business, finance is a critical activity for:

Answer 2

As Hector was packing to return to Sate University after his summer vacation, he realized that he owed many valuable such as a laptop computer, a stereo system, and a DVD player. An accountant would list all of these as Hector’s: