Fundamentals of Corporate Finance, 5th Edition by Robert Parrino, David Kidwell & Thomas Bates – Complete Test Bank Covering All Chapters

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TEST BANK FOR FUNDAMENTALS OF
CORPORATE FINANCE 5TH EDITION BY
ROBERT PARRINO,DAVID KIDWELL AND
BATES GILLAN | ALL CHAPTERS
COVERED




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Chapter 1 The Financial Manager and the Firm

1) The financial manager is responsible for making decisions that are in the best interests
of the firm's owners.
Answer: TRUE
Diff: 1
Learning Objective: LO 1
Bloomcode: Knowledge
AACSB: Analytic
IMA: FSA
AICPA: Process and Resource Management Perspectives

2) A patent is a productive asset for a technology-based
firm. Answer: TRUE
Diff: 1
Learning Objective: LO 1
Bloomcode: Knowledge
AACSB: Analytic
IMA: Business Economics
AICPA: Global and Industry Perspectives

3) Intangible assets generate most of a manufacturing firm's cash
flows. Answer: FALSE
Diff: 2
Learning Objective: LO 1
Bloomcode: Application
AACSB: Analytic
IMA: Corporate Finance
AICPA: Process and Resource Management Perspectives

4) The most fundamental way a business can grow in size is by reinvesting cash flows or
earnings. Answer: TRUE
Diff: 1
Learning Objective: LO 1
Bloomcode: Knowledge
AACSB: Analytic
IMA: FSA
AICPA: Process and Resource Management Perspectives




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5) A firm that goes bankrupt will always be
liquidated. Answer: FALSE
Diff: 2
Learning Objective: LO 1
Bloomcode: Application
AACSB: Analytic
IMA: Corporate Finance
AICPA: Resource Management

6) Capital assets are generally short term in
nature. Answer: FALSE
Diff: 1
Learning Objective: LO 1
Bloomcode: Knowledge
AACSB: Analytic
IMA: Corporate Finance
AICPA: Process and Resource Management Perspectives

7) A good capital budgeting or investment decision is one in which the benefits are worth
more to the firm than the cost of the project.
Answer: TRUE
Explanation: Regardless of the project, a good investment is one in which the benefits are
worth more to the firm than the costs of the asset.
Diff: 2
Learning Objective: LO 1
Bloomcode: Analysis
AACSB: Analytic
IMA: Budget Preparation
AICPA: Resource Management

8) Investment decisions determine how firms raise capital to pay for their
investments. Answer: FALSE
Diff: 1
Learning Objective: LO 1
Bloomcode: Knowledge
AACSB: Analytic
IMA: Investment Decisions
AICPA: Strategic/Critical
Thinking

9) Net working capital is the dollar difference between a firm's total current assets
and total liabilities.
Answer: FALSE
Diff: 1
Learning Objective: LO 1
Bloomcode: Knowledge
AACSB: Analytic

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IMA: Budget Preparation
AICPA: Process and Resource Management Perspectives




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