TEST BANK FOR ESSENTIAL
OF CORPORATE FINANCE 8TH
EDITION BY WESTERFIELD
ROSS JORDAN 2026
1
,TABLE OF CONTENTS
PART ONE: OVERVIEW OF FINANCIAL MANAGEMENT
Chapter 1: Introduction to Financial Management
PART TWO: UNDERSTANDING FINANCIAL STATEMENTS AND CASH FLOW
Chapter 2: Financial Statements, Taxes, and Cash Flow
Chapter 3: Working with Financial Statements
PART THREE: VALUATION OF FUTURE CASH FLOWS
Chapter 4: Introduction to Valuation: The Time Value of Money
Chapter 5: Discounted Cash Flow Valuation
PART FOUR: VALUING STOCKS AND BONDS
Chapter 6: Interest Rates and Bond Valuation
Chapter 7: Equity Markets and Stock Valuation
PART FIVE: CAPITAL BUDGETING
Chapter 8: Net Present Value and Other Investment Criteria
Chapter 9: Making Capital Investment Decisions
PART SIX: RISK AND RETURN
Chapter 10: Some Lessons from Capital Market History
Chapter 11: Risk and Return
PART SEVEN: LONG-TERM FINANCING
Chapter 12: Cost of Capital
Chapter 13: Leverage and Capital Structure
Chapter 14: Dividends and Dividend Policy
Chapter 15: Raising Capital
PART EIGHT: SHORT-TERM FINANCIAL MANAGEMENT
Chapter 16: Short-Term Financial Planning
Chapter 17: Working Capital Management
PART NINE: TOPICS IN BUSINESS FINANCE
Chapter 18: International Aspects of Financial Management
2
, Chapter 02
Financial Statements, Taxes, And Cash Flow
Multiple Choice Questions
1. Net Working Capital Is Defined As:
A. The Depreciat ed Book Valu e Of A Firm's Fixed
Assets.
B. The Valu e Of A Firm's Current
Assets.
C. Availab le Cash Minus Current
Liabilit ies .
D. Total Assets Minus Total
Liabilities.
E. Current Assets Minus Current
Liabilities.
2. The Accounting Statement That Measures The Revenues, Expenses, And Net Income Of A
Firm Over A Period Of Time Is Called The:
A. Statement Of Cash
Flows.
B. Income
Statement.
C. GAA P
Statement.
D. Balance
Sheet.
E. Net Working Capital
Schedule.
3. The Financial Statement That Summarizes A Firm's Accounting Value As Of A Particu lar Date
Is Called The:
A. Income
Statement.
B. Cash Flow
Statement.
C. Liquidity
Position.
D. Balance
Sheet.
E. Periodic Operating
Statement.
3
, 4. Which One Of The Following Decreases Net Income But Does Not Affect The Operatin g
Cash Flow Of A Firm That Owes No Taxes For The Current Year?
A. Indirect
Cost
B. Direct
Cost
C. Noncash
Item
D. Period
Cost
E. Variab le
Cost
5. Which One Of The Follo win g Terms Is Defined As The Total Tax Paid Divided By The Total
Taxab le Income?
A. Average Tax
Rate
B. Variab le Tax
Rate
C. Marginal Tax
Rate
D. Absolute Tax
Rate
E. Contingent Tax
Rate
6. Which One Of The Following Is The Tax Rate That Applies To The Next Dollar Of Taxable
Income That A Firm Earns?
A. Average Tax
Rate
B. Variab le Tax
Rate
C. Marginal Tax
Rate
D. Absolute Tax
Rate
E. Contingent Tax
Rate
4
OF CORPORATE FINANCE 8TH
EDITION BY WESTERFIELD
ROSS JORDAN 2026
1
,TABLE OF CONTENTS
PART ONE: OVERVIEW OF FINANCIAL MANAGEMENT
Chapter 1: Introduction to Financial Management
PART TWO: UNDERSTANDING FINANCIAL STATEMENTS AND CASH FLOW
Chapter 2: Financial Statements, Taxes, and Cash Flow
Chapter 3: Working with Financial Statements
PART THREE: VALUATION OF FUTURE CASH FLOWS
Chapter 4: Introduction to Valuation: The Time Value of Money
Chapter 5: Discounted Cash Flow Valuation
PART FOUR: VALUING STOCKS AND BONDS
Chapter 6: Interest Rates and Bond Valuation
Chapter 7: Equity Markets and Stock Valuation
PART FIVE: CAPITAL BUDGETING
Chapter 8: Net Present Value and Other Investment Criteria
Chapter 9: Making Capital Investment Decisions
PART SIX: RISK AND RETURN
Chapter 10: Some Lessons from Capital Market History
Chapter 11: Risk and Return
PART SEVEN: LONG-TERM FINANCING
Chapter 12: Cost of Capital
Chapter 13: Leverage and Capital Structure
Chapter 14: Dividends and Dividend Policy
Chapter 15: Raising Capital
PART EIGHT: SHORT-TERM FINANCIAL MANAGEMENT
Chapter 16: Short-Term Financial Planning
Chapter 17: Working Capital Management
PART NINE: TOPICS IN BUSINESS FINANCE
Chapter 18: International Aspects of Financial Management
2
, Chapter 02
Financial Statements, Taxes, And Cash Flow
Multiple Choice Questions
1. Net Working Capital Is Defined As:
A. The Depreciat ed Book Valu e Of A Firm's Fixed
Assets.
B. The Valu e Of A Firm's Current
Assets.
C. Availab le Cash Minus Current
Liabilit ies .
D. Total Assets Minus Total
Liabilities.
E. Current Assets Minus Current
Liabilities.
2. The Accounting Statement That Measures The Revenues, Expenses, And Net Income Of A
Firm Over A Period Of Time Is Called The:
A. Statement Of Cash
Flows.
B. Income
Statement.
C. GAA P
Statement.
D. Balance
Sheet.
E. Net Working Capital
Schedule.
3. The Financial Statement That Summarizes A Firm's Accounting Value As Of A Particu lar Date
Is Called The:
A. Income
Statement.
B. Cash Flow
Statement.
C. Liquidity
Position.
D. Balance
Sheet.
E. Periodic Operating
Statement.
3
, 4. Which One Of The Following Decreases Net Income But Does Not Affect The Operatin g
Cash Flow Of A Firm That Owes No Taxes For The Current Year?
A. Indirect
Cost
B. Direct
Cost
C. Noncash
Item
D. Period
Cost
E. Variab le
Cost
5. Which One Of The Follo win g Terms Is Defined As The Total Tax Paid Divided By The Total
Taxab le Income?
A. Average Tax
Rate
B. Variab le Tax
Rate
C. Marginal Tax
Rate
D. Absolute Tax
Rate
E. Contingent Tax
Rate
6. Which One Of The Following Is The Tax Rate That Applies To The Next Dollar Of Taxable
Income That A Firm Earns?
A. Average Tax
Rate
B. Variab le Tax
Rate
C. Marginal Tax
Rate
D. Absolute Tax
Rate
E. Contingent Tax
Rate
4
