, 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
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
