Test bank for Fundamentals of Corporate Finance 5th Edition by Robert Parrino and Thomas Bates All Chapters 1-21 Covered

Test bank
Fundamentals of Corporate Finance
5th Edition by Robert Parrino and Thomas Bates
All Chapters 1-21 Covered




1

,TABLE OF CONTENT
v v




1.vThevFinancialvManagervandvthevFirm

2.vThevFinancialvSystemvandvthevLevelvofvInterestvRates

3.vFinancialvStatements,vCashvFlows,vandvTaxes

4.vAnalyzingvFinancialvStatements

5.vThevTimevValuevofvMoney

6.vDiscountedvCashvFlowsvandvValuation

7.vRiskvandvReturn

8.vBondvValuationvandvthevStructurevofvInterestvRates

9.vStockvValuation

10.vThevFundamentalsvofvCapitalvBudgeting

11.vCashvFlowsvandvCapitalvBudgeting

12.vEvaluatingvProjectvEconomics

13.vThevCostvofvCapital

14.vWorkingvCapitalvManagement

15.vHowvFirmsvRaisevCapital

16.vCapitalvStructurevPolicy

17.vDividends,vStockvRepurchasesvandvPayoutvPolicy

18.vBusinessvFormation,vGrowth,vandvValuation

19.vFinancialvPlanningvandvManagingvGrowth

20.vOptionsvandvCorporatevFinance

21.vInternationalvFinancialvManagement

2

,FundamentalsvofvCorporatevFinance,v5thvEditionvbyvRobertvParrino,vDavidvKidwell,vBatesv&vGillan.v


Chapterv1-21

Chapterv1 ThevFinancialvManagervandvthevFirm

1) Thevfinancialvmanagervisvresponsiblevforvmakingvdecisionsvthatvarevinvthevbestvinterestsvofvthevf
irm'svowners.
Answer:v TRUEvDiff:v
1
LearningvObjective:v LOv1vBloomc
ode:v KnowledgevAACSB:v Analyt
ic
IMA:v v FSA
AICPA:v v ProcessvandvResourcevManagementvPerspectives

2) Avpatentvisvavproductivevassetvforvavtechnology-
basedvfirm.vAnswer:v TRUE
Diff:v1
LearningvObjective:v LOv1vBloomc
ode:v KnowledgevAACSB:v Analyt
ic
IMA:v v BusinessvEconomics
AICPA:v v GlobalvandvIndustryvPerspectives

3) Intangiblevassetsvgeneratevmostvofvavmanufacturingvfirm'svcashvflows.
vAnswer:v FALSE

Diff:v2
LearningvObjective:v LOv1vBloomc
ode:v ApplicationvAACSB:v Analyt
ic
IMA:v v CorporatevFinance
AICPA:v v ProcessvandvResourcevManagementvPerspectives

4) Thevmostvfundamentalvwayvavbusinessvcanvgrowvinvsizevisvbyvreinvestingvcashvflowsvorvearnings.vA
nswer:v TRUE
Diff:v1
LearningvObjective:v LOv1vBloomc
ode:v KnowledgevAACSB:v Analyt
ic
IMA:v v FSA
AICPA:v v ProcessvandvResourcevManagementvPerspectives

3

, 5) Avfirmvthatvgoesvbankruptvwillvalwaysvbevliquidated.vA
nswer:v FALSE
Diff:v2
LearningvObjective:v LOv1vBloomc
ode:v ApplicationvAACSB:v Analyt
ic
IMA:v CorporatevFinancevAICPA:
v ResourcevManagement




6) Capitalvassetsvarevgenerallyvshortvtermvinvnature.
vAnswer:v FALSE

Diff:v1
LearningvObjective:v LOv1vBloomc
ode:v KnowledgevAACSB:v Analyt
ic
IMA:v v CorporatevFinance
AICPA:v v ProcessvandvResourcevManagementvPerspectives

7) Avgoodvcapitalvbudgetingvorvinvestmentvdecisionvisvonevinvwhichvthevbenefitsvarevworthvmorevtovt
hevfirmvthanvthevcostvofvthevproject.
Answer:v v TRUE
Explanation:v Regardlessvofvthevproject,vavgoodvinvestmentvisvonevinvwhichvthevbenefitsvarevworthvm
orevtovthevfirmvthanvthevcostsvofvthevasset.
Diff:v2
LearningvObjective:v LOv1vBloo
mcode:v AnalysisvAACSB:v An
alytic
IMA:v BudgetvPreparationvAICPA:
v ResourcevManagement




8) Investmentvdecisionsvdeterminevhowvfirmsvraisevcapitalvtovpayvforvtheirvinvestments.v
Answer:v FALSE
Diff:v1
LearningvObjective:v LOv1vBloomc
ode:v KnowledgevAACSB:v Analyt
ic
IMA:v InvestmentvDecisionsv AICPA:
v Strategic/CriticalvThinking




9) Netvworkingvcapitalvisvthevdollarvdifferencevbetweenvavfirm'svtotalvcurrentvassetsvandvtotalv
liabilities.
Answer:v FALSEvDiff:
v1

LearningvObjective:v LOv1vBloomc
ode:v KnowledgevAACSB:v Analyt

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