53.
The overall goal of capital budgeting projects should be to:
54.
An example of a firm’s financing decision would be:
55.
Which of the following is a capital budgeting decision?
56.
Which of these duties are responsibilities of the corporate treasurer?
57.
The term “capital structure” refers to:
58.
Firms can alter their capital structure by:
59.
Which one of these statements is correct?
60.
A firm decides to pay for a small investment project through a $1 million increase in short-term bank loans. This is best
described as an example of a(n):
61.
The short-term decisions of financial managers are comprised of:
62.
A block holder is commonly defined as an investor who:
63.
Which of the firm’s financial managers is most likely to be involved with obtaining financing for the firm?
64.
In a large corporation, preparation of the firm’s financial statements would most likely be conducted by the:
65.
In a firm having both a treasurer and a controller, which of the following would most likely be handled by the controller?
66.
Which one of the following statements more accurately describes the controller than the treasurer?
67.
A chief financial officer would typically:
68.
Which one of these determines the minimum acceptable rate of return on a capital investment?
69.
A financial analyst in a corporation may be involved with all of the following EXCEPT:
70.
Investment banks like Morgan Stanley or Goldman Sachs:
71.
The primary goal of corporate management should be to:
72.
A corporate board of directors should provide support for the top management team:
73.
Which of the following appears to be the most appropriate goal for corporate management?
74.
A firm with spare cash
75.
Financial managers should only accept investment projects that:
76.
Agency problems can least be controlled by:
77.
Which one of these best defines the objective of a well-functioning financial market?
78.
Corporate raiders will be looked upon most favorably if they:
79.
Ethical decision making by management has a payoff for shareholders in terms of:
80.
Ethical decision making in business:
81.
A corporate director:
82.
In which of the following organizations would agency problems be least likely to occur?
83.
Sole proprietorships resolve the issue of agency problems primarily by:
84.
Which one of the following can best be characterized as an agency problem?
85.
Which of the following is least likely to represent an agency problem?
86.
When managers’ compensation plans are tied in a meaningful manner to the value of the firm, agency problems:
87.
A firm’s reputation:
88.
Which of the following groups is least likely to be considered a stakeholder of the firm?
89.
A manager‘s compensation plan that offers financial incentives for increases in quarterly profitability may create agency
problems in that:
90.
One continuing problem with managerial incentive compensation plans is that:
91.
Which one of the following forms of compensation is most apt to align the interests of managers and shareholders?
92.
Which of the following is a real asset?
93.
Which one of these statements is correct?
94.
Short selling involves selling a security:
Chapter 01 Test Bank – Static Summary
Category
# of Questions
AACSB: Analytical Thinking
1
AACSB: Communication
16
AACSB: Diversity
1
AACSB: Ethics
16
AACSB: Reflective Thinking
60
Accessibility: Keyboard Navigation
94
Blooms: Analyze
1
Blooms: Apply
22
Blooms: Remember
14
Blooms: Understand
57
Difficulty: 1 Easy
31
Difficulty: 2 Medium
57
Difficulty: 3 Hard
6
Gradable: automatic
94
Learning Objective: 01–01 Give examples of the investment and financing decisions that financial managers make.
20
Learning Objective: 01–02 Distinguish between real and financial assets.
8
Learning Objective: 01–03 Cite some of the advantages and disadvantages of organizing a business as a corporation.
26
Learning Objective: 01–04 Describe the responsibilities of the CFO, treasurer; and controller.
10
Learning Objective: 01–05 Explain why maximizing market value is the natural financial goal of the corporation.
8
Learning Objective: 01-06 Understand what is meant by “agency problems” and cite some of the ways
that corporate governance
helps mitigate agency problems.
16
Learning Objective: 01–07 Explain why unethical behavior does not maximize market value.
6
Topic: Agency costs and problems
11
Topic: Capital structure
2
Topic: Ethics, governance, and regulation
2
Topic: Financial management decisions
18
Topic: Forms of business organization
25
Topic: Goal of financial management
16
Topic: Introduction to corporate finance
5
Topic: Management organization and roles
15