1. In which of the following organizations would agency problems be least likely to occur?
a. A sole proprietorship
b. A partnership
c. A public corporation
d. A private corporation
e. All of the above are equally likely to suffer from agency problems.
2. Which of the following is NOT a reason for the importance of working capital management?
Improved working capital management improves liquidity
Reducing the costs of short-term financing increases profitability
Current liabilities are not responsive to time-sensitive decisions
Managing assets so that inventory matches current sales can facilitate an inverse relationship between sales and their capital requirments