Corporate Finance 9th Edition [Canadian Edition] by Ross, Westerfield, Jaffe, Jordan, Driss Test Bank
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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 1) The balance sheet is made up of what five key components: 1) ______ A) fixed assets, current liabilities, long term debt, tangible current assets and shareholders' equity. B) intangible fixed assets, current liabilities, long term debt, net income and current assets. C) fixed assets, long term debt, current assets, current liabilities and shareholders' equity. D) current assets, fixed assets, long term debt, shareholders equity and retained earnings. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Topic : 01-01 What is Corporate Finance? Source : Chapter 01 Test Bank > TB 01-01 The balance sheet is made up of what five ke...
2) In terms of the balance sheet model of the firm, the value of the firm in financial markets is
equal to: 2) ______ A) tangible fixed assets plus intangible fixed assets. B) sales minus costs. C) cash inflow minus cash outflow. D) the value of the debt plus the value of the equity. E) the value of the debt minus the value of the equity. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Topic : 01-01 What is Corporate Finance? Source : Chapter 01 Test Bank > TB 01-02 In terms of the balance sheet model of the f...
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3) Inventory is a component of: 3) ______ A) current assets. B) current liabilities. C) equity. D) fixed assets. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Topic : 01-01 What is Corporate Finance? Source : Chapter 01 Test Bank > TB 01-03 Inventory is a component of:
4) Using the balance sheet model of the firm, finance may be thought of as analysis of three
primary subject areas. Which of the following groups correctly lists these three areas? 4) ______ A) Capital budgeting, capital structure, net working capital. B) Capital budgeting, capital structure, security marketing. C) Capital budgeting, net working capital, tax analysis. D) Capital budgeting, tax analysis, security marketing. E) Net working capital, tax analysis, security marketing. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Topic : 01-01 What is Corporate Finance? Source : Chapter 01 Test Bank > TB 01-04 Using the balance sheet model of the firm, f...
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5) Which of the following is not considered one of the basic questions of corporate finance? 5) ______ A) What long-lived assets should the firm invest? B) How much inventory should the firm hold? C) How can the firm raise cash for required capital expenditures? D) How should the short-term operating cash flows be managed? E) What amount of long term debt and equity should the company issue to the market in
the following years? Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Topic : 01-01 What is Corporate Finance? Source : Chapter 01 Test Bank > TB 01-05 Which of the following is not considered one...
6) The need to manage net working capital arises because: 6) ______ A) financial management is naturally broken into those areas. B) shareholders want to ensure they receive dividend payments. C) there is a mismatch between the timing of cash inflows and cash outflows. D) the sum of current assets and current liabilities usually is zero. E) the capital structure pie is limited in size. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Topic : 01-01 What is Corporate Finance? Source : Chapter 01 Test Bank > TB 01-06 The need to manage net working capital arise...
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7) Which one of these is a cash outflow from a corporation? 7) ______ A) sale of an asset B) dividend payment C) sale of common stock D) issuance of debt E) profit retained by the firm Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Topic : 01-01 What is Corporate Finance? Source : Chapter 01 Test Bank > TB 01-07 Which one of these is a cash outflow from a ...
8) Which one of these is a cash inflow to a corporation? 8) ______ A) Purchase of a long-term asset B) Repurchase of shares C) Collection of account receivables D) Reduction of accounts payables Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Topic : 01-01 What is Corporate Finance? Source : Chapter 01 Test Bank > TB 01-08 Which one of these is a cash inflow to a cor...
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9) In the managerial structure of the corporation the two officers and their responsibilities that
report directly to the Chief Financial Officer are: 9) ______ A) the credit manager who handles accounts receivable and the tax manager who
minimizes tax payments. B) the personnel manager who manages salaries and compensation and the production operations manager who manages facility operations. C) the treasurer who is responsible handling cash flow and making financial decisions and the tax manager who minimizes tax payments. D) the controller who manages the accounting function and the treasurer who is responsible handling cash flow and making financial decisions. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Topic : 01-01 What is Corporate Finance? Source : Chapter 01 Test Bank > TB 01-09 In the managerial structure of the corporati...
10) Value is created and recognized over time if: 10) ______ A) cash raised is invested in the investment activities of the firm. B) funds are raised in the capital markets. C) cash paid to shareholders and bondholders, is greater than cash raised in the financial
markets. D) management pursues activities to reduce taxes to zero. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Topic : 01-01 What is Corporate Finance? Source : Chapter 01 Test Bank > TB 01-10 Value is created and recognized over time if...
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11) Time preference refers to the fact that: 11) ______ A) corporations match current assets with current liabilities to minimize the short-term
financing cost. B) corporations match both current and long-term assets with current and long-term liabilities to minimize the change of bankruptcy. C) investors prefer current cash flows to future cash flows. D) investors seek to time cash flows to minimize tax liabilities. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Topic : 01-01 What is Corporate Finance? Source : Chapter 01 Test Bank > TB 01-11 Time preference refers to the fact that:
12) A corporate security can be viewed as a contingent claim on the firm's value. This means
that: 12) ______ A) debt holders will receive their payoff from the firm based on their fixed claim or the
firm's value if less than the fixed claim. B) debt holders will receive the maximum between the firm's value and the fixed claim. C) no payoff will be made to the debtholders unless the firm's value is greater than the fixed claim of the debt. D) no debt payoff will be made if there is an equity payoff. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Topic : 01-02 The Balance-Sheet Model of the Firm Source : Chapter 01 Test Bank > TB 01-12 A corporate security can be viewed as a cont...
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