Fundamentals of Corporate Finance, 5th Edition by Robert , David , Bates & Gillan. (All Chapters 1-21) | TEST BANK

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Fundamentals of Corporate Finance, 5th Edition by Robert , David , Bates & Gillan. (All Chapters 1-21) | TEST BANK

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Institution Fundamentals Of Corporate Finance, 5th Edition

Course Fundamentals of Corporate Finance, 5th Edition

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Fundamentals of Corporate Finance, 5th Edition by Robert , David , Bates & Gillan. (All Chapters 1-21) | TEST BANK

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2

1

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,Chapter 1 ss The Financial Manager and the Firm
ss ss ss ss ss

1) The financial manager is responsible for making decisions that are in the best interests of
ss ss ss ss ss ss ss ss ss ss ss ss ss ss

the firm's owners.
ss ss

Answer: TRUE gh s s gh ss

Diff: 1
ss ss

LearningObjective: LO 1 s s s ss

Bloomcode: Knowledge
ss s s

AACSB: ss

Analytic
IMA: FSA
ss

AICPA: Process and Resource Management Perspectives ss ss ss ss

2) A patent is a productive asset for a technology-based
ss ss ss ss ss ss ss ss

firm. Answer: TRUE
ss ssgh gh s s gh ss

Diff: 1 ss

LearningObjective: LO 1 s s s ss

Bloomcode: Knowledge
ss s s

AACSB: ss

Analytic
IMA: Business Economics ss

AICPA: Global and Industry Perspectives ss ss ss

3) Intangible assets generate most of amanufacturing firm's cash flows.
ss ss ss ss ss ss ss ss

Answer:
gh gh s s g ssh

FALSE Diff: 2
ss ss ss

LearningObjective: LO 1 s s s ss

Bloomcode: Application
ss s s

AACSB: ss

Analytic
IMA: Corporate Finance ss

AICPA: Process and Resource Management Perspectives ss ss ss ss

4) The most fundamental way a business can grow in size is byreinvesting cash flows or earnings.
s ss ss s ss ss ss ss ss ss ss s ss ss ss ss

Answer:
gh TRUE gh s s gh s s

Diff: 1 ss

LearningObjective: LO 1 s s s ss

Bloomcode: Knowledge
ss s s

AACSB: ss

Analytic
IMA: FSA
ss

AICPA: Process and Resource Management Perspectives ss ss ss ss

3

, 5) A firm that goes bankrupt will always be
ss ss ss ss ss ss ss

liquidated. Answer:
ss FALSE s s gh s s g ssh ss

Diff: 2 ss

LearningObjective: LO 1 s s s ss

Bloomcode: Application
ss s s

AACSB:
ss

Analytic
IMA: Corporate Finance AICPA:
s s ss ss

ResourceManagement

6) Capital assets are generally short term in
ss ss ss ss ss ss

nature. Answer:
ss FALSE ssgh gh s s g ssh ss

Diff: 1 ss

LearningObjective: LO 1 s s s ss

Bloomcode: Knowledge
ss s s

AACSB:
ss

Analytic
IMA: Corporate Finance ss

AICPA: Process and Resource Management Perspectives ss ss ss ss

7) A good capital budgeting or investment decision is one in which the benefits are worth moreto
s s ss ss ss ss ss ss ss ss ss ss ss ss ss ss s

the firm than the cost of the project.
ss ss ss ss ss ss ss ss

Answer: TRUE gh s s gh s s gh

Explanation: Regardless of the project, a good investment is one in which the benefits are ss ss ss ss ss ss ss ss ss ss ss ss ss

worth more to the firm than the costs of the asset.
ss ss ss ss ss ss ss ss ss ss

Diff: 2 ss

LearningObjective: LO 1 s s s ss

Bloomcode: Analysis AACSB:
ss s s ss

Analytic
IMA: Budget Preparation
s s ss

AICPA: Resource Management
ss s s s

8) Investment decisions determine how firms raise capital to pay for their investments.
ss ss ss ss ss ss ss ss ss ss ss

Answer:
ss FALSE gh s s g ssh ss

Diff: 1 ss

Learning Objective: LO 1 ss s s ss

Bloomcode: Knowledge
ss s s

AACSB:
ss

Analytic
IMA: Investment Decisions AICPA:
s s ss s s

Strategic/Critical Thinking gh

9) Net working capital is the dollar difference between a firm's total current assets and
ss ss ss ss ss ss ss ss ss ss ss ss ss

total liabilities.
ss

Answer: FALSE Diff: gh s s g ssh s s s s

1
Learning Objective: LO 1 ss s s ss

Bloomcode: Knowledge
ss s s

AACSB:
ss

Analytic
4

Connected book

Robert Parrino, David S. Kidwell, Thomas Bates, Stuart L. Gillan Fundamentals of Corporate Finance

Publisher: 2021 ISBN: 9781119795438 Edition: Unknown

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Uploaded on: October 3, 2025
Number of pages: 35
Written in: 2025/2026
Type: Exam (elaborations)
Contains: Questions & answers

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