TEST BANK
Foundations of Financial Management, 18th edition
by Stanley Block, Geoffrey Hirt
SC
O
R
EG
U
ID
ES
, Table of Content
PART 1: INTRODUCTION
1. The Goals and Activities of Financial Management
PART 2: FINANCIAL ANALYSIS AND PLANNING
2. Review of Accounting
3. Financial Analysis
4. Financial Forecasting
5. Operating and Financial Leverage
SC
PART 3: WORKING CAPITAL MANAGEMENT
6. Working Capital and the Financing Decision
7. Current Asset Management
8. Sources of Short-Term Financing
O
PART 4: THE CAPITAL BUDGETING PROCESS
9. The Time Value of Money
10. Valuation and Rates of Return
R
11. Cost of Capital
12. The Capital Budgeting Decision
EG
13. Risk and Capital Budgeting
PART 5: LONG-TERM FINANCING
14. Capital Markets
15. Investment Banking
16. Long-Term Debt and Lease Financing
U
17. Common and Preferred Stock Financing
18. Dividend Policy and Retained Earnings
ID
19. Convertibles, Warrants, and Derivatives
PART 6: EXPANDING THE PERSPECTIVE OF CORPORATE FINANCE
20. External Growth through Mergers
ES
21. International Financial Management
,Foundations of Financial Management, 18e (Block)
Chapter 1 The Goals and Activities of Financial Management
1) As finance emerged as a new field, much emphasis was placed on mergers and acquisitions.
Answer: TRUE
Difficulty: 1 Easy
Topic: Introduction to corporate finance
SC
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
O
2) Inflation is assumed to be a temporary problem that does not affect financial decisions.
Answer: FALSE
Difficulty: 1 Easy
R
Topic: Financial management decisions
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.
EG
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
3) Financial capital is composed of long-term plant and equipment, as well as other tangible
investments.
U
Answer: FALSE
Difficulty: 1 Easy
Topic: Introduction to corporate finance
ID
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.
Bloom's: Remember
AACSB: Reflective Thinking
ES
Accessibility: Keyboard Navigation
4) Real capital is composed of long-term plant and equipment.
Answer: TRUE
Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.
Bloom's: Remember
1
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
, AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
5) During the 1930s, financial practice revolved around such topics as the preservation of capital,
maintenance of liquidity, the reorganization of financially troubled corporations, and bankruptcy.
Answer: TRUE
Difficulty: 1 Easy
Topic: Introduction to corporate finance
SC
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
O
6) In the mid 1950s, finance began to change to a more analytical, decision-oriented approach.
Answer: TRUE
Difficulty: 1 Easy
R
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.
EG
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
7) Recently, the emphasis of financial management has been on the relationship between risk and
return.
U
Answer: TRUE
Difficulty: 1 Easy
Topic: Introduction to corporate finance
ID
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.; 01-03 The relationship of risk to return is a central focus of finance.
Bloom's: Understand
AACSB: Analytical Thinking
ES
Accessibility: Keyboard Navigation
8) The first Nobel Prizes given to finance professors were for their contributions to capital
structure theory and portfolio theories of risk and return.
Answer: TRUE
Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.
Bloom's: Remember
2
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Foundations of Financial Management, 18th edition
by Stanley Block, Geoffrey Hirt
SC
O
R
EG
U
ID
ES
, Table of Content
PART 1: INTRODUCTION
1. The Goals and Activities of Financial Management
PART 2: FINANCIAL ANALYSIS AND PLANNING
2. Review of Accounting
3. Financial Analysis
4. Financial Forecasting
5. Operating and Financial Leverage
SC
PART 3: WORKING CAPITAL MANAGEMENT
6. Working Capital and the Financing Decision
7. Current Asset Management
8. Sources of Short-Term Financing
O
PART 4: THE CAPITAL BUDGETING PROCESS
9. The Time Value of Money
10. Valuation and Rates of Return
R
11. Cost of Capital
12. The Capital Budgeting Decision
EG
13. Risk and Capital Budgeting
PART 5: LONG-TERM FINANCING
14. Capital Markets
15. Investment Banking
16. Long-Term Debt and Lease Financing
U
17. Common and Preferred Stock Financing
18. Dividend Policy and Retained Earnings
ID
19. Convertibles, Warrants, and Derivatives
PART 6: EXPANDING THE PERSPECTIVE OF CORPORATE FINANCE
20. External Growth through Mergers
ES
21. International Financial Management
,Foundations of Financial Management, 18e (Block)
Chapter 1 The Goals and Activities of Financial Management
1) As finance emerged as a new field, much emphasis was placed on mergers and acquisitions.
Answer: TRUE
Difficulty: 1 Easy
Topic: Introduction to corporate finance
SC
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
O
2) Inflation is assumed to be a temporary problem that does not affect financial decisions.
Answer: FALSE
Difficulty: 1 Easy
R
Topic: Financial management decisions
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.
EG
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
3) Financial capital is composed of long-term plant and equipment, as well as other tangible
investments.
U
Answer: FALSE
Difficulty: 1 Easy
Topic: Introduction to corporate finance
ID
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.
Bloom's: Remember
AACSB: Reflective Thinking
ES
Accessibility: Keyboard Navigation
4) Real capital is composed of long-term plant and equipment.
Answer: TRUE
Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.
Bloom's: Remember
1
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
, AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
5) During the 1930s, financial practice revolved around such topics as the preservation of capital,
maintenance of liquidity, the reorganization of financially troubled corporations, and bankruptcy.
Answer: TRUE
Difficulty: 1 Easy
Topic: Introduction to corporate finance
SC
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
O
6) In the mid 1950s, finance began to change to a more analytical, decision-oriented approach.
Answer: TRUE
Difficulty: 1 Easy
R
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.
EG
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
7) Recently, the emphasis of financial management has been on the relationship between risk and
return.
U
Answer: TRUE
Difficulty: 1 Easy
Topic: Introduction to corporate finance
ID
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.; 01-03 The relationship of risk to return is a central focus of finance.
Bloom's: Understand
AACSB: Analytical Thinking
ES
Accessibility: Keyboard Navigation
8) The first Nobel Prizes given to finance professors were for their contributions to capital
structure theory and portfolio theories of risk and return.
Answer: TRUE
Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting,
and a number of other areas.
Bloom's: Remember
2
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
