Test Bank - Fundamentals of Financial Management, 16th Edition (Brigham, 2022), Chapters 1-21 | All Chapters Covered

TEST BANK FOR Fundamentals of Financial Management 16th Edition
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by Eugene F. Brigham and Joel F. Houston
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,1. An Overview of Financial
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Management.
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Note that there is an overlap between the T/F and multiple-choice questions, as some of the T/F
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statements are
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Multiple Choice: True/False dfdf dfdf




1. In most corporations, the CFO ranks under the CEO.
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a. True
b. False
ANSWER: True d f d f




2. The Chairman of the Board must also be the CEO.
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a. True
b. False
ANSWER: False d f d f




3. The board of directors is the highest ranking body in a corporation, and the chairman of the
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board is the highest
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chairman, and the board generally has the
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conditions. The CEO, however, cannot remove the board, but he or she
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the board voted out and a new board voted in should a conflict arise. It is possible for a
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person to simultaneously serve as CEO and chairman of the board, though many corporate
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control experts believe
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a. True
b. False
ANSWER: True d f d f




4. Partnerships and proprietorships generally have a tax advantage over corporations.
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a. True
b. False
ANSWER: True d f d f




5. A disadvantage of the corporate form of organization is that corporate stockholders are
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more exposed to
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typical partnership.
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a. True
b. False
ANSWER: False d f d f




6. An advantage of the corporate form of organization is that corporations are
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generally less highly
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a. True
b. False
ANSWER: False d f d f

,7. Some partners in a partnership may have different rights, privileges, and responsibilities than other
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partners.
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a. True

b. False
ANSWER: True d f d f




8. One advantage of the corporate form of organization is that it avoids double taxation.
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a. True
b. False
ANSWER: False d f d f




9. It is generally harder to transfer one's ownership interest in a partnership than in a corporation.
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a. True
b. False
ANSWER: True d f d f




10. One danger of starting a proprietorship is that you may be exposed to personal liability if
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the business goes
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operate the business.
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a. True
b. False
ANSWER: True d f d f




11. If a corporation elects to be taxed as an S corporation, then it can avoid the corporate
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tax. However, its
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a. True
b. False
ANSWER: True d f d f




12. If a corporation elects to be taxed as an S corporation, then both it and its stockholders
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can avoid all Federal
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encourage the formation of small
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a. True
b. False
ANSWER: False d f d f




13. It is generally less expensive to form a corporation than a proprietorship because, with a
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proprietorship,
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a. True
b. False
ANSWER: False d f d f




14. The more capital a firm is likely to require, the greater the probability that it will be organized
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as a corporation.
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a. True
b. False
ANSWER: True d f d f

, 15. One disadvantage of forming a corporation rather than a partnership is that this makes it
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more difficult for
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a. True