Test Bank for Fundamentals of Corporate Finance, 5th Edition | Parrino, Kidwell, Bates & Gillan

TEST BANK
All Chapters Included




1

,TABLE OF CONTENT

1. The Financial Manager and the Firm

2. The Financial System and the Level of Interest Rates

3. Financial Statements, Cash Flows, and Taxes

4. Analyzing Financial Statements

5. The Time Value of Money

6. Discounted Cash Flows and Valuation

7. Risk and Return

8. Bond Valuation and the Structure of Interest Rates

9. Stock Valuation

10. The Fundamentals of Capital Budgeting

11. Cash Flows and Capital Budgeting

12. Evaluating Project Economics

13. The Cost of Capital

14. Working Capital Management

15. How Firms Raise Capital

16. Capital Structure Policy

17. Dividends, Stock Repurchases and Payout Policy

18. Business Formation, Growth, and Valuation

19. Financial Planning and Managing Growth

20. Options and Corporate Finance

21. International Financial Management




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,TEST BANK FOR Fundamentals of Corporate Finance, 5th Edition by Robert Parrino, David

Kidwell, Bates & Gillan. ISBN 9781119795438
Chapter 1-21

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
IMA: Budget Preparation

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