Test Bank for Fundamentals Of Corporate Finance, 12th Canadian Edition by Stephen A. Ross
Complete Answers Included ✅
Chap 01 12ce - Ross
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) The size, timing, and risk of cash flows are important when evaluating a capital budgeting
decision.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-01 The size, timing, and risk of cash...
2) A capital expenditure project becomes desirable when the project is worth more to the firm
than the cost to acquire it.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-02 A capital expenditure project becomes desira...
3) A capital expenditure project becomes desirable when the present value of the cash flow
generated by the project exceeds the project's present value of cost.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-03 A capital expenditure project becomes desirable ...
1
,4) Optimal capital structure determines the least expensive sources of funds for the firm to
borrow.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-04 Optimal capital structure determines the least expen...
5) Optimal capital structure determines how much debt the firm should have in relation to its
level of equity to maximize firm value.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-05 Optimal capital structure determines how...
6) Capital structure determines the level of current assets that is required to maintain the firm's
operations.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-06 Capital structure determines the level of current...
2
,7) Capital structure determines how much risk is associated with the future cash flows of a
project.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-07 Capital structure determines how much risk i...
8) Determining when a supplier should be paid is a capital structure decision.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-08 Determining when a supplier should be paid i...
9) Developing a firm's accounts receivable policies is a capital structure decision.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-09 Developing a firm's accounts receivable...
3
, 10) Determining the amount of money to borrow to finance a 10-year project is a capital
structure decision.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-10 Determining the amount of money to borrow to...
11) Deciding if a new project should be accepted is a working capital decision.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-11 Deciding if a new project should be accepted...
12) When evaluating a project in which a firm might invest, the size but not the timing of the
cash flows is important.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Easy
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-12 When evaluating a project in which a firm mi...
4
Complete Answers Included ✅
Chap 01 12ce - Ross
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) The size, timing, and risk of cash flows are important when evaluating a capital budgeting
decision.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-01 The size, timing, and risk of cash...
2) A capital expenditure project becomes desirable when the project is worth more to the firm
than the cost to acquire it.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-02 A capital expenditure project becomes desira...
3) A capital expenditure project becomes desirable when the present value of the cash flow
generated by the project exceeds the project's present value of cost.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-03 A capital expenditure project becomes desirable ...
1
,4) Optimal capital structure determines the least expensive sources of funds for the firm to
borrow.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-04 Optimal capital structure determines the least expen...
5) Optimal capital structure determines how much debt the firm should have in relation to its
level of equity to maximize firm value.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-05 Optimal capital structure determines how...
6) Capital structure determines the level of current assets that is required to maintain the firm's
operations.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-06 Capital structure determines the level of current...
2
,7) Capital structure determines how much risk is associated with the future cash flows of a
project.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-07 Capital structure determines how much risk i...
8) Determining when a supplier should be paid is a capital structure decision.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-08 Determining when a supplier should be paid i...
9) Developing a firm's accounts receivable policies is a capital structure decision.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-09 Developing a firm's accounts receivable...
3
, 10) Determining the amount of money to borrow to finance a 10-year project is a capital
structure decision.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-10 Determining the amount of money to borrow to...
11) Deciding if a new project should be accepted is a working capital decision.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Medium
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-11 Deciding if a new project should be accepted...
12) When evaluating a project in which a firm might invest, the size but not the timing of the
cash flows is important.
⊚ true
⊚ false
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Remember
Difficulty : Easy
Learning Objective : 01-01 The basic types of financial management decisions and the role of the fina
Topic : 01-04 1.4 The Agency Problem and Control of the Corporation
Source : Chapter 01 Test Bank - Static > TB 01-12 When evaluating a project in which a firm mi...
4
