Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Chapter 01
Introduction to Corporate Finance
Chapter 01 Introduction to Corporate Finance Answer Key
Multiple Choice Questions
1.
Which one of the following terms is defined as the management of a firm's
long-term investments?
2.
Which one of the following terms is defined as the mixture of a firm's debt
and equity financing?
3.
Which one of the following is defined as a firm's short-term assets and its
short-term liabilities?
4.
A business owned by a solitary individual who has unlimited liability for its
debt is called a:
5.
A business formed by two or more individuals who each have unlimited
liability for all of the firm's business debts is called a:
6.
A business partner whose potential financial loss in the partnership will not
exceed his or her investment in that partnership is called a:
7.
A business created as a distinct legal entity and treated as a legal "person"
is called a:
8.
Which one of the following terms is defined as a conflict of interest between
the corporate shareholders and the corporate managers?
9.
A stakeholder is:
10.
Which of the following questions are addressed by financial managers?
I. How should a product be marketed?
II. Should customers be given 30 or 45 days to pay for their credit
purchases?
III. Should the firm borrow more money?
IV. Should the firm acquire new equipment?
11.
Which one of the following functions should be the responsibility of the
controller rather than the treasurer?
12.
The controller of a corporation generally reports directly to the:
13.
Which one of the following correctly defines the upward chain of command
in a typical corporate organizational structure?
14.
Which one of the following is a capital budgeting decision?
15.
Which of the following should a financial manager consider when analyzing
a capital budgeting project?
I. project start up costs
II. timing of all projected cash flows
III. dependability of future cash flows
IV. dollar amount of each projected cash flow
16.
Which one of the following is a capital structure decision?
17.
The decision to issue additional shares of stock is an example of which one
of the following?
18.
Which of the following accounts are included in working capital
management?
I. accounts payable
II. accounts receivable
III. fixed assets
IV. inventory
19.
Which one of the following is a working capital management decision?
20.
Which one of the following statements concerning a sole proprietorship is
correct?
