Assignment Week 1
Problem #1 – The most important difference between a corporation and other types of corporate
organizational forms would be how they are taxed. Shareholders of a corporation pay taxes twice.
Problem #3 – The organization forms that give their owners limited liability are Sole Proprietorships and
Limited partnerships. Limited partnerships.
Problem #4 – The main advantages of a corporation would be: there is no limit to the number of owners
a corporation may have. The business cycle continues, even in the event of a death of an owner. main
disadvantage of a corporation would be that they are more expensive to set up than sole
proprietorships. Shareholders of a corporation are double taxed.
Problem #8 – The most important decision a financial manager must make is Making Investment
Decisions. They must weigh the costs and benefits of each investment or project and decide which of
them qualify as good uses of the money stockholders have invested in the firm. These investments
shape what the firm does and if those decisions add value for the owner.
Problem #9 – There is an overriding corporate objective that seeks to maximize the financial benefit to
all persons holding stock in the corporation, hence why shareholders agree to the same goal for the
financial manager.
Problem 14# a. Proceed
b. Do Not Proceed
c. Proceed
Problem #15 – This will negatively impact stakeholders as customers customer would likely be sold sour
/spoiled milk. This would eventually result in customers taking their business elsewhere, which would
resulting a negative impact on the cash flow of the supermarket. This would result in a negative overall
experience for stakeholders.
Problem #17 – A private corporation has a limited number of owners and there is not organized market
for their shares. A public corporation has many owners and trades shares in an organized market