Test Bank for Fundamentals of Corporate Finance 10th CANADIAN Edition Ross / All Chapters 1 - 26 / Full Complete

, 1) In capital budgeting, the financial manager tries to identify investment opportunities
that are worth more to the firm than they cost to acquire. - 1) TRUE

2) The size, timing and risk of cash flows are important when evaluating a capital
budgeting decision. - 2) TRUE

3) A capital expenditure project becomes desirable when the project is worth more to
the firm than the cost to acquire it. - 3) TRUE

4) A capital expenditure project becomes desirable when the value of the cash flow
generated by the project exceeds the project's cost. - 4) TRUE

5) Capital structure determines the least expensive sources of funds for the firm to
borrow. - 5) TRUE

6) Capital structure determines how much debt the firm should have in relation to its
level of equity. - 6) TRUE

7) Capital structure determines the level of current assets that is required to maintain
the firm's operational level. - 7) FALSE

8) Capital structure determines how much risk is associated with the future cash flows
of a project. - 8) FALSE

9) Determining when a supplier should be paid is a capital structure decision. - 9)
FALSE

10) Establishing the accounts receivable policies is a capital structure decision. - 10)
FALSE

11) Determining the amount of money to borrow in order to finance a 10-year project is
a capital structure decision. - 11) TRUE

12) Deciding if a new project should be accepted is a working capital decision. - 12)
FALSE

13) When evaluating a project in which a firm might invest, the size but not the timing of
the cash flows is important. - 13) FALSE

14) Working capital management addresses the firm's appropriate level of inventory. -
14) TRUE

15) Common stockholders or limited partners can lose, at most, what they have
invested in a firm. - 15) TRUE