FIN 419 Final Exam

This document of FIN 419 Final Exam includes answers to the next questions:

1. The sole proprietor has unlimited liability; his or her total investment in the business, but not his or her personal assets, can be taken to satisfy creditors.

2. Time-value of money is based on the belief that a dollar that will be received at some future date is worth more than a dollar today.

3. Holders of equity have claims on both income and assets that are secondary to the claims of creditors.

4. The possibility that the issuer of a bond will not pay the contractual interest or principal payments as scheduled is called maturity risk.

5. The breakeven point in dollars can be computed by dividing the contribution margin into the fixed operating costs.