1)Maximization of shareholder wealth is a concept in which

A.

profits are maximized on a quarterly basis.

B.

optimally increasing the long-term value of the firm is emphasized.

C.

increased earnings is of primary importance.

D.

virtually all earnings are paid as dividends to common stockholders.

2)Regarding risk levels, financial managers should

A.

avoid higher risk projects because they destroy value

B.

evaluate investor's desire for risk

C.

pursue higher risk projects because they increase value

D.

focus primarily on market fluctuations

3)One of the major disadvantages of a sole proprietorship is

A.

the simplicity of decision making.

B.

low operating costs.

C.

that there is unlimited liability to the owner.

D.

low organizational costs.

4)The statement...