Fundamentals of Corporate Finance, 2026 Release Test Bank – Richard A. Brealey

Test Bank for Fundamentals of Corporate Finance, 2026 Evergreen Release
by Richard A. Brealey, Myers, Marcus, Racculia
Updated Test / Exam Questions | ISBN 9781266561849 (Answers Included)

Chap 01 2026 Release - Brealey
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) The liability of sole proprietors is limited to the amount of their investment in the company.
1) ______
⊚ true
⊚ false

Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Understand
Business Competency : Communication
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-01 Understand how businesses can organize as corporations.
Topic : Forms of business organization
Source : Chapter 01 Test Bank - Static > TB TF Qu. 01-01 The liability of sole proprietors is...



2) General partners have limited personal liability for business debts in a limited partnership.
2) ______
⊚ true
⊚ false

Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Understand
Business Competency : Communication
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-01 Understand how businesses can organize as corporations.
Topic : Forms of business organization
Source : Chapter 01 Test Bank - Static > TB TF Qu. 01-02 General partners have limited personal liability...




1

,3) The separation of ownership and management is one distinctive feature of corporations.
3) ______
⊚ true
⊚ false

Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Business Competency : Reflective Thinking
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-01 Understand how businesses can organize as corporations.
Topic : Forms of business organization
Source : Chapter 01 Test Bank - Static > TB TF Qu. 01-03 The separation of ownership and management...



4) A major disadvantage of partnerships is that they have double taxation of profits.
4) ______
⊚ true
⊚ false

Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Understand
Business Competency : Communication
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-01 Understand how businesses can organize as corporations.
Topic : Forms of business organization
Source : Chapter 01 Test Bank - Static > TB TF Qu. 01-04 A major disadvantage of partnerships is...




2

,5) Financial assets have value because they are claims on the firm's real assets and the cash that
those assets will produce.
5) ______
⊚ true
⊚ false

Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Understand
Business Competency : Reflective Thinking
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-02 Cite the main financial decisions that corporations face.
Topic : Financial management decisions
Source : Chapter 01 Test Bank - Static > TB TF Qu. 01-05 Financial assets have value because they...



6) Capital budgeting decisions are used to determine how to raise the cash necessary for
investments.
6) ______
⊚ true
⊚ false

Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Business Competency : Reflective Thinking
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-02 Cite the main financial decisions that corporations face.
Topic : Financial management decisions
Source : Chapter 01 Test Bank - Static > TB TF Qu. 01-06 Capital budgeting decisions are used to...




3

, 7) A successful investment is one that increases the value of the firm.
7) ______
⊚ true
⊚ false

Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Understand
Business Competency : Reflective Thinking
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-02 Cite the main financial decisions that corporations face.
Topic : Goal of financial management
Source : Chapter 01 Test Bank - Static > TB TF Qu. 01-07 A successful investment is one that...



8) Facebook's decision to spend $700 million to acquire Instagram is an investment decision.
8) ______
⊚ true
⊚ false

Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Reflective Thinking
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-02 Cite the main financial decisions that corporations face.
Topic : Financial management decisions
Source : Chapter 01 Test Bank - Static > TB TF Qu. 01-08 Facebook's decision to spend $700 million...




4