test bank for Fundamentals of Corporate Finance 12th Canadian Edition by Ross
Westerfield Jordan
ａll ch download via https://r.24zhen.com/K95zF
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) The size, timing, and risk of cash flows are important when evaluating a capital budgeting
decision.
⊚ true
⊚ false
2) A capital expenditure project becomes desirable when the project is worth more to the firm
than the cost to acquire it.
⊚ true
⊚ false
3) A capital expenditure project becomes desirable when the present value of the cash flow
generated by the project exceeds the project's present value of cost.
⊚ true
⊚ false
4) Optimal capital structure determines the least expensive sources of funds for the firm to
borrow.
⊚ true
⊚ false
5) Optimal capital structure determines how much debt the firm should have in relation to its
level of equity to maximize firm value.
⊚ true
⊚ false
Version 1 1
,6) Capital structure determines the level of current assets that is required to maintain the firm's
operations.
⊚ true
⊚ false
7) Capital structure determines how much risk is associated with the future cash flows of a
project.
⊚ true
⊚ false
8) Determining when a supplier should be paid is a capital structure decision.
⊚ true
⊚ false
9) Developing a firm's accounts receivable policies is a capital structure decision.
⊚ true
⊚ false
10) Determining the amount of money to borrow to finance a 10-year project is a capital
structure decision.
⊚ true
⊚ false
11) Deciding if a new project should be accepted is a working capital decision.
⊚ true
⊚ false
Version 1 2
,12) When evaluating a project in which a firm might invest, the size but not the timing of the
cash flows is important.
⊚ true
⊚ false
13) Managing a firm's working capital addresses the firm's appropriate level of inventory.
⊚ true
⊚ false
14) Common stockholders or limited partners can lose, at most, what they have invested in a
firm.
⊚ true
⊚ false
15) Partnership income is treated as personal income of the partners.
⊚ true
⊚ false
16) A limited partner can lose his or her investment in the partnership.
⊚ true
⊚ false
17) Maximization of the current earnings of the firm is the main goal of the financial manager.
⊚ true
⊚ false
Version 1 3
, 18) The primary goal of a financial manager should be to maximize the value of shares issued to
new investors in the corporation.
⊚ true
⊚ false
19) The primary goal of financial management is to minimize the corporate tax liability.
⊚ true
⊚ false
20) Control of the firm ultimately rests with board of directors. They elect the management, who,
in turn, lead the company.
⊚ true
⊚ false
21) The goal of financial managers does not imply that illegal or unethical actions should be
taken in the hope of increasing the value of the firm.
⊚ true
⊚ false
22) Unethical behaviour does not impact volatility of the stock markets.
⊚ true
⊚ false
23) The board of directors has the power to act on behalf of the shareholders to hire and fire the
operating management of the firm. In a legal sense, the directors are "principals" and the
shareholders are "agents".
⊚ true
⊚ false
Version 1 4
Westerfield Jordan
ａll ch download via https://r.24zhen.com/K95zF
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) The size, timing, and risk of cash flows are important when evaluating a capital budgeting
decision.
⊚ true
⊚ false
2) A capital expenditure project becomes desirable when the project is worth more to the firm
than the cost to acquire it.
⊚ true
⊚ false
3) A capital expenditure project becomes desirable when the present value of the cash flow
generated by the project exceeds the project's present value of cost.
⊚ true
⊚ false
4) Optimal capital structure determines the least expensive sources of funds for the firm to
borrow.
⊚ true
⊚ false
5) Optimal capital structure determines how much debt the firm should have in relation to its
level of equity to maximize firm value.
⊚ true
⊚ false
Version 1 1
,6) Capital structure determines the level of current assets that is required to maintain the firm's
operations.
⊚ true
⊚ false
7) Capital structure determines how much risk is associated with the future cash flows of a
project.
⊚ true
⊚ false
8) Determining when a supplier should be paid is a capital structure decision.
⊚ true
⊚ false
9) Developing a firm's accounts receivable policies is a capital structure decision.
⊚ true
⊚ false
10) Determining the amount of money to borrow to finance a 10-year project is a capital
structure decision.
⊚ true
⊚ false
11) Deciding if a new project should be accepted is a working capital decision.
⊚ true
⊚ false
Version 1 2
,12) When evaluating a project in which a firm might invest, the size but not the timing of the
cash flows is important.
⊚ true
⊚ false
13) Managing a firm's working capital addresses the firm's appropriate level of inventory.
⊚ true
⊚ false
14) Common stockholders or limited partners can lose, at most, what they have invested in a
firm.
⊚ true
⊚ false
15) Partnership income is treated as personal income of the partners.
⊚ true
⊚ false
16) A limited partner can lose his or her investment in the partnership.
⊚ true
⊚ false
17) Maximization of the current earnings of the firm is the main goal of the financial manager.
⊚ true
⊚ false
Version 1 3
, 18) The primary goal of a financial manager should be to maximize the value of shares issued to
new investors in the corporation.
⊚ true
⊚ false
19) The primary goal of financial management is to minimize the corporate tax liability.
⊚ true
⊚ false
20) Control of the firm ultimately rests with board of directors. They elect the management, who,
in turn, lead the company.
⊚ true
⊚ false
21) The goal of financial managers does not imply that illegal or unethical actions should be
taken in the hope of increasing the value of the firm.
⊚ true
⊚ false
22) Unethical behaviour does not impact volatility of the stock markets.
⊚ true
⊚ false
23) The board of directors has the power to act on behalf of the shareholders to hire and fire the
operating management of the firm. In a legal sense, the directors are "principals" and the
shareholders are "agents".
⊚ true
⊚ false
Version 1 4
