1.0
Chapter
1
McGraw-Hill/Irwin
Introduction
to Financial
Management
©2001 The McGraw-Hill Companies All Rights Reserved
1.1
Key Concepts and Skills
 Know
the basic types of financial management
decisions and the role of the financial manager
 Know the goal of financial management
 Know the financial implications of the different
forms of business organization
 Understand the conflicts of interest that can arise
between owners and managers
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.2
Chapter Outline






Finance: A Quick Look
Business Finance and The Financial Manager
Forms of Business Organization
The Goal of Financial Management
The Agency Problem and Control of the
Corporation
Financial Markets and the Corporation
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.3
1.1 Finance: A Quick Look
The Four Basic Areas
Why Study Finance
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.4
The Four Basic Areas of Finance
•
Corporate (or business) finance
•
The basic financial ideas and principles
•
•
•
•
Covered in the section 1.2
Investments
Financial institutions
International finance
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.5
The Four Basic Areas of Finance
•
Investments:
•
Deals with financial assets such as stocks and
bonds
• Value/price of the financial asset
• Potential risks and rewards of investing
• Asset Allocation
• “Mixture” of different types of financial
assets to hold
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.6
The Four Basic Areas of Finance
•
Investment Career opportunities
•
Stockbroker or Financial advisor
•
•
Portfolio manager
•
•
Advise customers on what types of investments to
consider and helps them make buy and sell decisions
Manage money for investors, pension funds, insurance
companies, and other types of institutions
Security analyst
•
•
Research individual investments, such as stock in a
particular company
Make a determination as to whether the price is right
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.7
The Four Basic Areas of Finance
Financial Institutions
 Companies that specialize in financial matters
 Banks – commercial and investment, credit unions,
savings and loans
 Insurance companies
 Job opportunities
 Banking: Commercial Loan Officer
 Insurance: analyst – decide whether a particular
risk was suitable for insuring and what the
premium should be
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.8
The Four Basic Areas of Finance
 International

Finance
Involves “international aspects” of either corporate finance,
investments, or financial institutions
 Some portfolio managers and security analysts specialize in
non-U.S. companies
 Banks make loans across country lines
 Many U.S. businesses have extensive overseas operations
 Need employees familiar with: exchange rates, political risk,
the customs of other countries, and the language
 It may allow you to work in other countries or at least travel on a
regular basis
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.9
Why Study Finance?

Marketing and Finance


Marketers constantly work with budgets
Marketing research, the design of marketing and distribution
channels, and product pricing


Financial analysts rely heavily on marketing analysts



Analyzing costs and benefits of projects of all types
The two frequently work together to evaluate the profitability of
proposed projects and products
Sales projections are a key input in almost every type of new
product analysis and are often developed jointly between marketing
and finance.
The finance industry employees marketers to help sell financial
products: bank products, insurance policies, mutual funds
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.10
Why Study Finance?
 Accounting
and Finance
Accountants are often required to make financial
decisions as well as perform traditional accounting
duties
 Accountants must know finance to understand the
implications of many financial contracts and the
impact they have on financial statements
 Financial analysts are some of the most extensive and
important end users of accounting information

McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.11
Why Study Finance?
 Management
and Finance
Management strategists must have a clear
understanding of the financial implications of
business plans
 Management employees are expected to have a strong
understanding of how their jobs impact profitability
and to be able to work within their areas to improve
profitability
 Studying finance teaches you: the characteristics of
activities that create value!

McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.12
Why Study Finance?
 You

and Finance
You’ll have to make financial decisions that will be
very important to you personally




Personal budgeting and day-to-day cash flow issues
How to invest your retirement funds
Start your own business
Determine loan payments “before” you take out a loan
 Student loan
 Car loan
 Home mortgage
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.13
1.2 Business Finance and
The Financial Manager
What is Business Finance
The Financial Manager
Financial Management Decisions
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.14
What is Business Finance?
Business Finance Answers the following three
questions:
 1. What long-term investments should you take on?



2. Where will you get the long-term financing to pay for
your investment?


Bring in other owners or borrow
3. How will you manage your everyday financial
activities


What lines of business will you be in and what sorts of buildings,
machinery, and equipment will you need?
Collecting from customers, paying suppliers, etc.
We’ll look at each of these topics in the chapters ahead.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.15
The Financial Manager
The financial management function is usually associated
with a top officer of the firm, often called the chief
financial officer (CFO) or vice president of finance
(Figure 1.1 – Page 7)
 The CFO or VP of Finance coordinates the activities of
the treasurer and the controller
 The controller’s office: handles cost and financial
accounting, tax payments, and management information
systems.
 The treasurer’s office: is responsible for managing the
firm’s cash and credit, its financial planning, and its
capital expenditures.

McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.16
The Financial Manager

The treasury activities are all related to the three
general questions raised previously:




1. What long-term investments should you take on?
2. Where will you get the long-term financing to pay for your
investment?
3. How will you manage your everyday financial activities?
Our study concentrates mainly on activities usually
associated with the treasurer’s office.

the chapters ahead deal primarily with these issues.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.17
Financial Management Decisions
 The
financial manager must be concerned with
three basic types of questions:
 Capital budgeting
 Capital structure
 Working capital management
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.18
Financial Management Decisions

Capital Budgeting: The process of planning and
managing a firm’s long-term investments

The financial manager tries to identify investment opportunities
that are: “worth more to the firm than they cost to acquire”


Regardless of the specific investment, the financial manager
must be concerned with:




i.e. the value of the cash flow generated by an asset exceeds the cost
of that asset.
How much cash is expected to be received (Size)
When it is expected to be received (Timing)
How likely it is to be received (Risk)
Size, Timing, and Risk of cash flows are by far the most
important considerations when evaluating a business
decision.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.19
Financial Management Decisions
 Capital
Structure (or financial structure):
Refers to the specific mixture of long-term debt
and equity the firm uses to finance its operations
 Two main concerns:
How much should the firm borrow?
 What are the least expensive sources of funds for the
firm?



Long term financing expenses can be considerable
Different possibilities must be carefully considered
 Various lenders and loan types
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.20
Financial Management Decisions
Capital: A firm’s short-term assets
(cash, inventory, etc.) and liabilities (money
owed suppliers, etc)
 Working Capital Management – is the day-today activity that ensures the firm has sufficient
resources to continue operations and avoid costly
interruptions
 Working

Activities related to the firm’s receipt and
disbursement of cash
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.21
1.3 Forms of Business Organization
Sole Proprietorship
Partnership
Corporation
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.22
Forms of Business Organization
 Three
major forms in the united states
Sole proprietorship
 Partnership




General
Limited
Corporation


S-Corp
Limited liability company
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.23
Sole Proprietorship:
A business owned by one person

Advantages





Easiest to start
Least regulated
Single owner keeps all the
profits
Taxed once as personal
income

No distinction between
personal and business
income
McGraw-Hill/Irwin
Disadvantages


Limited to life of owner
Equity capital limited to
owner’s personal wealth


Unlimited liability for business
debts


May be unable to exploit new
opportunities due to
insufficient capital
Creditors can look to the
proprietor’s personal assets for
payment
Difficult to sell ownership
interest
©2001 The McGraw-Hill Companies All Rights Reserved
1.24
Partnership:
A business formed by two or
more individuals or entities
 General Partnership: all the partners share
in gains or losses, and all have unlimited
liability for all partnership debts, not just
some particular share.
 Limited Partnership: one or more general
partners run the business and have unlimited
liability and there will be one or more limited
partners which do not actively participate in
the business
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.25
Partnership:
A business formed by two or
more individuals or entities
 A “limited”
partner’s liability for business
debts is limited to the amount that partner
contributes to the partnership.
 However, if the limited partner becomes
deeply involved in the business decisions they
will assume the obligations of a general
partner
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.26
Partnership:
Advantages and Disadvantages are basically
the same as those for a proprietorship.

Advantages





Two or more owners
More capital available
 But still limited to the
partners’ combined wealth
which limits the ability of
such a business to grow
Relatively easy to start
Income taxed once as personal
income
McGraw-Hill/Irwin
Disadvantages



General partners have
unlimited liability for
partnership debts
Limited Life: the partnership
dissolves when one general
partner dies or wishes to sell
Ownership by a general partner
is not easily transferred
because a new partnership
must be formed
©2001 The McGraw-Hill Companies All Rights Reserved
Corporation:
A business created as a “distinct 1.27
legal entity” (“person”) owned by one or more individuals
or entities. A Corporation is separate and distinct from its
owners.
 Advantages
 Disadvantages

Separation of ownership and
management


Limited liability to
owners/stockholders




Stockholders elect a board of
directors who select managers
Unlimited life
Transfer of ownership is easy
Easier to raise capital – sell
stock
More complicated to start:



Limited to the amount of their
investment
McGraw-Hill/Irwin

Articles of Inc. and Bylaws
Separation of ownership
and management
Double taxation (income
taxed at the corporate rate
and then dividends taxed at
personal rate)
©2001 The McGraw-Hill Companies All Rights Reserved
1.28
1.4 The Goal of Financial Management
Profit Maximization
The Goal of Financial Management in a Corporation
A More General Financial Management Goal
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.29
Profit Maximization

Profit Maximization - is probably the most commonly
cited business goal and may refer to some sort of “longrun” or “average” profits? It’s unclear exactly what this
means.

Do we mean profits this year with the following undesirable
activities???






Deferring maintenance
Letting inventories run down
Other short-run cost-cutting measures
Do we mean accounting net income or earnings per share?
Does this mean we should do anything and everything to
maximize owner wealth?
What’s the appropriate trade-off between current and future
profits?
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.30
The Goal Of Financial Management
The financial manager in a corporation makes decisions
for the stockholders of the firm.
 From the stockholders’ point of view, what’s a good
financial management decision?



Good decisions increase the value of the stock, and poor
decisions decrease it.
The goal of financial management is to maximize the
current value per share of the existing stock.

i.e. Maximizing the market price per share
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
A More General Financial
Management Goal
1.31
 What
is the appropriate goal when the firm has
no traded stock?
 The total value of the stock in a corporation is
simply equal to the value of the owners’ equity.
 Therefore, a more general way of stating our
goal is:
 Maximize the market value of the existing
owners’ equity.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
A More General Financial
Management Goal
1.32
With this goal in mind, it doesn’t matter whether the
business is a proprietorship, a partnership, or a
corporation.
 For each of these, good financial decisions increase the
market value of the owners’ equity and poor financial
decisions decrease it.



Identifying goods and services that add value to the firm because
they are desired and valued in the free marketplace.
Finally, our goal “does not imply” that the financial
manager should take illegal or unethical actions in
the hope if increasing the value of the equity in the
firm.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.33
1.5 The Agency Problem and
Control of the Corporation
Agency Relationships
Management Goals
Do Managers Act in the Stockholders’ Interests?
Stakeholders
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.34
Agency Relationships
 In
large corporations ownership can be spread
over a huge number of stockholders
 This dispersion of ownership arguably means
that management effectively controls the firm
 Will management act in the best interests of the
stockholders?
 Might not management pursue its own goals at
the stockholders’ expense?
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.35
Agency Relationships

The relationship between stockholders and management
is called an agency relationship.


Such a relationship exits whenever someone (the principal) hires
another (the agent) to represent his or her interest.
Agency Problem – the possibility of conflict of interest
between the owners and management of a firm



Agency problems exist whenever there is a separation of
ownership and management
The way an agent is compensated is one factor that affects
agency problems.
Car sell example page 13

Flat fee vs. commission
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.36
Management Goals
Management and Stockholder interests might differ
 Agency Problem Example 1, Page 13:


For instance: A new investment is expected to favorably impact
the stock price, but is also a relatively risky venture



The owners of the firm: will wish to take the investment (because
the share value will rise)
The management: may not because there’s the possibility that things
will turn out badly and management jobs will be lost.
If management doesn’t take the investment, the stockholders may
lose a valuable opportunity
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.37
Management Goals

Or Agency Problem Example 2, Page 13:

Left to themselves, managers tend to maximize the amount of
resources over which they have control



May lead to an overemphasis on business size or growth



Increase their business Power or Wealth!
Build their domain or empire!
Overpaying to buy another company just to increase the size of the
business or demonstrate corporate power
Such a purchase does not benefit the owners of the purchasing
company.
Or management may tend to overemphasize organizational
survival to protect job security.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.38
Management Goals
Do Managers Act in the Stockholders’ Interests?
 Depends

How closely are management goals aligned with
stockholder goals?


on two factors:
Relates to the way managers are compensated
Can management be replaced if they don’t pursue
stockholder goals?

Relates to control of the firm
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.39
Management Goals
Managerial Compensation
 Management
frequently has a significant
economic incentive to increase share value
for two reasons:
 1.
Managerial compensation, particularly at
the top, is usually tied to financial
performance in general and oftentimes to
share value in particular.

For example, managers are frequently given the option to buy
stock at a fixed price - the more the stock is worth, the more
valuable is the option
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.40
Management Goals
Managerial Compensation

2. Better performers within the firm will tend
to get promoted.


Those managers who are successful in pursuing stockholder
goals will be in greater demand in the labor market and thus
command higher salaries.
Promotion of Managers “only” if the firm prospers, helps
ensure managers act in the best interest of owners.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.41
Management Goals
Managerial Compensation
 Therefore:
 Incentives can be used to align management and
stockholder interests
 The incentives need to be structured carefully to
make sure that they achieve their goal
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.42
Management Goals
Control of the Firm
Control of the firm ultimately rests with stockholders.
 They elect the board of directors, who, in turn, hire and
fire management.
 The mechanism used by unhappy stockholders to replace
existing management is called a proxy fight.
 A proxy is the authority to vote someone else’s stock.
 A proxy fight develops when a group solicits proxies in
order to replace the existing board, and thereby replace
existing management.

McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.43
Management Goals
Control of the Firm
 Another
way management can be replaced is by
takeover.
 Those firms that are poorly managed are more
attractive as acquisitions than well-managed
firms because a greater profit potential exists.
 Thus, avoiding a takeover by another firm gives
management another incentive to act in the
stockholders’ interests.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.44
Management Goals
Stakeholders
 Stakeholder:
Someone other than a stockholder
or creditor who potentially has a claim on the
cash flows of the firm.
Employees, customers, suppliers, and even the
government all have a financial interest in the firm.
 These groups will also attempt to exert control over
the firm, perhaps to the detriment of the owners.

McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
Management Goals
Recap:
1.45
Recap:
 The following help ensure managers act in the best
interest of owners?





A compensation package for managers that ties their salary
to the firm’s share price.
Managers are promoted only if the firm prospers.
The threat that if the firm does poorly, shareholders will use
a proxy fight to replace the existing management.
There’s a high degree of likelihood the firm will become a
takeover candidate if the firm performs poorly.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.46
1.6 Financial Markets and
The Corporation
Cash Flows to and from the Firm
Primary versus Secondary Markets
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.47
Cash Flows to and from the Firm
Financial Markets play an extremely important role in
corporate finance.
 Figure 1.2 (Page 16): Cash flows between the firm and
the “financial markets”:




A. Firm issues securities to raise cash.
B. Firm invest in assets.
C. Firm’s operations generate cash flow.



D. Cash is paid to government as taxes and other stakeholders may
receive cash.
E. Reinvested cash flows are plowed back into the firm.
F. Cash is paid out to investors in the form of interest and dividends.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.48
Cash Flows to and from the Firm
 A financial
market, like any market, is just a way
of bringing buyers and sellers together.
 In financial markets, it’s debt and equity
securities that are bought and sold.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.49
Primary versus Secondary Markets
term primary market – refers to the original
sale of securities by governments and
corporations.
 The secondary markets are those in which these
securities are bought and sold after the
original sale.
 Equities are issued solely by corporations.
 Debt securities are issued by both governments
and corporations.
 The
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.50
Primary versus Secondary Markets
Primary Markets
 In
a primary-market transaction, the
corporation is the seller, and the transaction
raises money for the corporation.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.51
Primary versus Secondary Markets
Primary Markets

Two types of primary-market transactions:

Public Offering: involves selling (debt and equity) securities to
the general public



Must be registered with the Securities and Exchange Commission
(SEC).
The accounting, legal, and selling costs of public offerings can be
considerable
Private Placement: is a negotiated sale involving a specific
buyer.


Life insurance companies or mutual funds
Avoids various regulatory requirements and the expense of public
offerings
 Does not have to be registered with the SEC or require the involvement of
underwriters (investment banks that specialize in selling securities to the
public)
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.52
Primary versus Secondary Markets
Secondary Markets
A secondary-market transaction involves one owner or
creditor selling to another
 The secondary markets provide the means for
transferring ownership of corporate securities.
 Although a corporation is only directly involved in a
primary-market transaction (when it sells securities to
raise cash), the secondary markets are still critical to
large corporations:


Investors are much more willing to purchase securities in a
primary-market transaction when they know that those securities
can later be resold if desired.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.53
Primary versus Secondary Markets
Dealer versus auction markets

There are two kinds of secondary markets:

Auction markets (NYSE)




Brokers and Agents match buyers and sellers
They do not actually own the commodity that is bought or sold
A real estate agent, for example, does not normally buy and sell
houses.
Dealer markets (Nasdaq)

Dealers buy and sell for themselves, at their own risk.
 A car dealer, for example, buys and sells automobiles
 Dealer markets in stocks and long-term debt are called over-the-counter
(OTC) markets
 Most trading in debt securities takes place over the counter.
 Dealers are connected electronically.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.54
Primary versus Secondary Markets
Dealer versus auction markets
 Auction
markets differ from dealer markets in
two ways:
1. An auction market, or exchange, has a physical
location (like Wall Street - NYSE).
 2. In a dealer market (Nasdaq)most of the buying and
selling is done by the dealer.

McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.55
Primary versus Secondary Markets
Trading in corporate securities
 The
equity shares of most of the large firms in
the United States trade in organized “Auction
Markets”.
The largest such market is the New York Stock
Exchange (NYSE) which accounts for more than 85%
of all the shares traded in auction markets.
 Other auction exchanges include the American Stock
Exchange (AMEX) and regional exchanges such as
the Pacific Stock Exchange.

McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.56
Primary versus Secondary Markets
Trading in corporate securities

In addition to the stock exchanges, there is a large OTC
market for stocks.


OTC markets have no physical location
In 1971, the National Association of Securities Dealers
(NASD) made available to dealers and brokers an
electronic quotation system called NASDAQ

There are roughly three times as many companies on Nasdaq as
on NYSE, but they tend to be much smaller in size and trade less
actively.


Exceptions: Microsoft and Intel
The total value of Nasdaq stocks is significantly less than the
total value of NYSE stocks.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.57
Primary versus Secondary Markets
Listing
Stocks that trade on an organized exchange are said to be
listed on that exchange.
 In order to be listed, firms must meet certain minimum
criteria, which differ for different exchanges, regarding:



Asset size, number of shareholders, etc.
NYSE has the most stringent requirements of the
exchanges in the United States.



Market Value of at least $60 million
At least 2,000 shareholders with at least 100 shares each
Additional minimums on earnings, assets, and the number of
shares outstanding.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
1.58
Quick Quiz
 What
are the four basic areas of finance?
 What are the three types of financial
management decisions and what questions are
they designed to answer?
 What are the three major forms of business
organization?
 What is the goal of financial management?
 What are agency problems and why do they exist
within a corporation?
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved
Chapter 1:
Homework and Test Review

1.59
Know chapter theories, concepts, and definitions



Re-read the chapter
Review the Power Point Presentation Slides
Review Critical Thinking and Concept Review Questions on
Page 19:

3, 4, 5, 6, 7, 8, and 12
*Remember you may have one 8 1/2 x 11 formula sheet (front
and back) for each test with anything you want on it. This
chapter represents approximately 1/5th of the 1st exam or
approximately 8 of 40 multiple choice questions.
McGraw-Hill/Irwin
©2001 The McGraw-Hill Companies All Rights Reserved