Test Bank for Corporate Finance, 12th Edition by Stephen Ross, Randolph Westerfield, Jeffrey Jaffe | Latest 2025/2026 Update

Test Bank for Corporate Finance 12th Edition by Ross
All Chapter 1-27 Fully Covered

,Corporate Finance, 12e (Ross) C C C




Chapter 1 Introduction to Corporate Finance
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1) The treasurer and the controller of a corporation generally report to the:
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A) board of directors.C C


B) chairman of the board. C C C


C) chief executive officer.
C C


D) president.
E) chief financial officer.
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Answer: E C C


Difficulty: 1 Easy
C C C


Section: 1.1 What is Corporate Finance?
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CTopic: Management organization and
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roles Bloom's:
C C Remember
AACSB: Reflective Thinking C


CAccessibility: Keyboard C


Navigation
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2) Which one of the following statements correctly depicts the common chain of command in a
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Ccorporation?
A) The information systems manager reports to the treasurer.
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B) The credit manager reports to the treasurer.
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C) The controller reports to the chief executive officer.
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D) The tax manager reports to the treasurer.
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E) The capital expenditures manager reports to the controller.
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Answer: B C C


Difficulty: 1 Easy
C C C


Section: 1.1 What is Corporate Finance?
CC C C C C


CTopic: Management organization and
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roles Bloom's:
C C Remember
AACSB: Reflective Thinking C


CAccessibility: Keyboard C


Navigation
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3) Which one of the following is a capital budgeting decision?
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A) Determining how much debt should be borrowed from a particular lender
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B) Deciding whether or not a new production facility should be built
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C) Deciding when to repay a long-term debt
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D) Determining how much inventory to keep on hand C C C C C C C


E) Deciding how much credit to grant to a particular customer
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Answer: B C C

,Difficulty: 1 Easy C C


Section: 1.1 What is Corporate Finance?
CC C C C C


CTopic: Capital budgeting
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Bloom's: Understand AACSB: C


Reflective Thinking C


CAccessibility: Keyboard Navigation C C C




4) Which one of these is a correct definition?
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A) Net working capital equals current assets plus current liabilities.
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B) Current liabilities are debts that must be repaid in 18 months or less.
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C) Current assets are assets with short lives, such as accounts receivable.
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D) Long-term debt is defined as a residual claim on a firm's assets.
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E) Tangible assets are fixed assets such as patents.
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Answer: C
Difficulty: 1 Easy
C C C


Section: 1.1 What is Corporate Finance?
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CTopic: Introduction to corporate finance
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CBloom's: Remember C


AACSB: Reflective Thinking
CAccessibility: Keyboard Navigation C C C




5) The corporate controller is generally responsible for which one of these functions?
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A) Capital expenditures C


B) Cash management
C


C) Tax reporting
C


D) Financial planning C


E) Credit management
C




Answer: C C C


Difficulty: 1 Easy
C C C


Section: 1.1 What is Corporate Finance?
CC C C C C


CTopic: Management organization and
C C C


roles Bloom's:
C C Remember
AACSB: Reflective Thinking C


CAccessibility: Keyboard C


Navigation
C



6) The corporate treasurer oversees which one of these areas?
C C C C C C C C


A) Financial planning C


B) Cost accounting
C


C) Tax reporting
C


D) Information systems C


E) Financial accounting C




Answer: A C C

, Difficulty: 1 Easy C C


Section: 1.1 What is Corporate Finance?
CC C C C C


CTopic: Management organization and
C C C


roles Bloom's:
C C Remember
AACSB: Reflective Thinking C


CAccessibility: Keyboard C


Navigation
C




7) A firm's capital structure refers to the firm's:
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A) mixture of various types of production equipment.
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B) investment selections for its excess cash reserves.
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C) combination of cash and cash equivalents. C C C C C


D) combination of accounts appearing on the left side of its balance sheet.
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E) proportions of financing from current and long-term debt and equity.
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Answer: E C C


Difficulty: 1 Easy
C C C


Section: 1.1 What is Corporate Finance?
CC C C C C


CTopic: Capital structure
CC C


Bloom's: Remember AACSB: C


Reflective Thinking C


CAccessibility: Keyboard Navigation C C C




8) Short-term finance deals with: C C C


A) the timing of cash flows.
C C C C


B) acquiring and selling fixed assets. C C C C


C) financing long-term projects. C C


D) capital budgeting. C


E) issuing additional shares of common stock.
C C C C C




Answer: A C C


Difficulty: 1 Easy
C C C


Section: 1.1 What is Corporate Finance?
CC C C C C


CTopic: Cash management - general
CC C C C


CBloom's: Understand
AACSB: Reflective Thinking C


CAccessibility: Keyboard C


Navigation
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