Test Bank for Fundamentals of Corporate Finance
4th Edition
Authors: Robert Parrino, Hue Hwa Au Yong, Nigel Morkel-Kingsbury,
Jennifer James, Paul Mazzola, James Murray, Lee Smales, Xiaoting Wei
Compiled by: Denny
,Test Bank For
Fundamentals of Corporate Finance, 4th Edition Robert Parrino, Hue Hwa Au Yong, Nigel
Morkel-Kingsbury, Jennifer James, Paul Mazzola, James Murray, Lee Smales, Xiaoting Wei
Chapter 1-21
Chapter 1: The Financial Manager and the Firm
Format: True/False
Learning Objective: LO 1
Level of Difficulty: Easy
Bloomcode: Knowledge
ny
AACSB: Analytic
IMA: FSA
AICPA: Resource Management
en
1. The financial manager is responsible for making decisions that are in the best interests
of the firm's owners.
D
A) True
B) False
Ans: A
by
Format: True/False
d
Learning Objective: LO 1
Level of Difficulty: Easy
le
Bloomcode: Knowledge
AACSB: Analytic
pi
IMA: Business Economics
AICPA: Industry/Sector Perspective
om
2. A patent is a productive asset for a technology-based firm.
A) True
B) False
C
Ans: A
Copyright © 2015 John Wiley & Sons, Inc. 1-1
, Format: True/False
Learning Objective: LO 1
Level of Difficulty: Medium
Bloomcode: Comprehension
AACSB: Analytic
IMA: Corporate Finance
AICPA: Resource Management
3. Intangible assets generate most of a manufacturing firm's cash flows.
A) True
B) False
Ans: B
ny
Format: True/False
Learning Objective: LO 1
en
Level of Difficulty: Easy
Bloomcode: Knowledge
AACSB: Analytic
D
IMA: FSA
AICPA: Resource Management
4. The most fundamental way that a business can grow in size is the reinvestment of cash
by
flows or earnings.
A) True
B) False
Ans: A
d
le
Format: True/False
pi
Learning Objective: LO 1
Level of Difficulty: Medium
om
Bloomcode: Comprehension
AACSB: Analytic
IMA: Corporate Finance
AICPA: Resource Management
C
5. When a firm goes bankrupt, it will always be liquidated.
A) True
B) False
Ans: B
Copyright © 2015 John Wiley & Sons, Inc. 1-2
, Format: True/False
Learning Objective: LO 1
Level of Difficulty: Easy
Bloomcode: Knowledge
AACSB: Analytic
IMA: Corporate Finance
AICPA: Resource Management
6. Capital assets are generally short term in nature.
A) True
B) False
Ans: B
ny
Format: True/False
Learning Objective: LO 1
Level of Difficulty: Medium
en
Bloomcode: Comprehension
AACSB: Analytic
IMA: Budget Preparation
D
AICPA: Resource Management
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 asset.
by
A) True
B) False
Ans: A
d
le
Format: True/False
Learning Objective: LO 1
Level of Difficulty: Easy
pi
Bloomcode: Knowledge
AACSB: Analytic
om
IMA: Investment Decisions
AICPA: Strategic/Critical Thinking
8. Financing decisions determine how firms raise cash to pay for their investments.
A) True
C
B) False
Ans: A
Copyright © 2015 John Wiley & Sons, Inc. 1-3
4th Edition
Authors: Robert Parrino, Hue Hwa Au Yong, Nigel Morkel-Kingsbury,
Jennifer James, Paul Mazzola, James Murray, Lee Smales, Xiaoting Wei
Compiled by: Denny
,Test Bank For
Fundamentals of Corporate Finance, 4th Edition Robert Parrino, Hue Hwa Au Yong, Nigel
Morkel-Kingsbury, Jennifer James, Paul Mazzola, James Murray, Lee Smales, Xiaoting Wei
Chapter 1-21
Chapter 1: The Financial Manager and the Firm
Format: True/False
Learning Objective: LO 1
Level of Difficulty: Easy
Bloomcode: Knowledge
ny
AACSB: Analytic
IMA: FSA
AICPA: Resource Management
en
1. The financial manager is responsible for making decisions that are in the best interests
of the firm's owners.
D
A) True
B) False
Ans: A
by
Format: True/False
d
Learning Objective: LO 1
Level of Difficulty: Easy
le
Bloomcode: Knowledge
AACSB: Analytic
pi
IMA: Business Economics
AICPA: Industry/Sector Perspective
om
2. A patent is a productive asset for a technology-based firm.
A) True
B) False
C
Ans: A
Copyright © 2015 John Wiley & Sons, Inc. 1-1
, Format: True/False
Learning Objective: LO 1
Level of Difficulty: Medium
Bloomcode: Comprehension
AACSB: Analytic
IMA: Corporate Finance
AICPA: Resource Management
3. Intangible assets generate most of a manufacturing firm's cash flows.
A) True
B) False
Ans: B
ny
Format: True/False
Learning Objective: LO 1
en
Level of Difficulty: Easy
Bloomcode: Knowledge
AACSB: Analytic
D
IMA: FSA
AICPA: Resource Management
4. The most fundamental way that a business can grow in size is the reinvestment of cash
by
flows or earnings.
A) True
B) False
Ans: A
d
le
Format: True/False
pi
Learning Objective: LO 1
Level of Difficulty: Medium
om
Bloomcode: Comprehension
AACSB: Analytic
IMA: Corporate Finance
AICPA: Resource Management
C
5. When a firm goes bankrupt, it will always be liquidated.
A) True
B) False
Ans: B
Copyright © 2015 John Wiley & Sons, Inc. 1-2
, Format: True/False
Learning Objective: LO 1
Level of Difficulty: Easy
Bloomcode: Knowledge
AACSB: Analytic
IMA: Corporate Finance
AICPA: Resource Management
6. Capital assets are generally short term in nature.
A) True
B) False
Ans: B
ny
Format: True/False
Learning Objective: LO 1
Level of Difficulty: Medium
en
Bloomcode: Comprehension
AACSB: Analytic
IMA: Budget Preparation
D
AICPA: Resource Management
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 asset.
by
A) True
B) False
Ans: A
d
le
Format: True/False
Learning Objective: LO 1
Level of Difficulty: Easy
pi
Bloomcode: Knowledge
AACSB: Analytic
om
IMA: Investment Decisions
AICPA: Strategic/Critical Thinking
8. Financing decisions determine how firms raise cash to pay for their investments.
A) True
C
B) False
Ans: A
Copyright © 2015 John Wiley & Sons, Inc. 1-3
