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To choose: The term that matches each sentence.
Explanation of Solution
- a) Investment decision: The decision made by the top management respective to the amount of funds that has to be deployed in the investment opportunities are investment decisions. Thus, the expenditures on the research and development are investment decisions.
- b) Financial asset: The asset that are not physical and whose value are derived from the contractual claim is known as the financial asset. Thus, a bank loan is a financial asset.
- c) Public corporation: The shares of the company that are traded freely in the stock exchange is known as public corporation. Thus, public corporation are listed on stock exchange.
- d) Corporations: These are separate and distinct entities from the owners. It is a voluntary associations of persons formed and organized to carry on a business. There are unlimited number of shareholders, shareholders can participate in managing the business. Liability is limited to the extent of shares held.
- e) Treasurer: An individual who is accountable for running the treasury in an organization is known as the treasurer. However, a treasurer is responsible for the bank relationship.
- f) Agency cost: The cost that results from the conflict of interest that takes place among the shareholders and managers and the amount that are charged by the agent of a company like the auditors and lawyers is known as agency cost.
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