Test Bank for Corporate Finance 12th Edition by Ross
All Chapter 1-27 Fully Covered
,Corporate Finance, 12e (Ross) C C C
Chapter 1 Introduction to Corporate Finance
C C C C C
1) The treasurer and the controller of a corporation generally report to the:
C C C C C C C C C C C
A) board of directors.C C
B) chairman of the board. C C C
C) chief executive officer.
C C
D) president.
E) chief financial officer.
C C
Answer: E C C
Difficulty: 1 Easy
C C C
Section: 1.1 What is Corporate Finance?
CC C C C C
CTopic: Management organization and
C C C
roles Bloom's:
C C Remember
AACSB: Reflective Thinking C
CAccessibility: Keyboard C
Navigation
C
2) Which one of the following statements correctly depicts the common chain of command in a
C C C C C C C C C C C C C C
Ccorporation?
A) The information systems manager reports to the treasurer.
C C C C C C C
B) The credit manager reports to the treasurer.
C C C C C C
C) The controller reports to the chief executive officer.
C C C C C C C
D) The tax manager reports to the treasurer.
C C C C C C
E) The capital expenditures manager reports to the controller.
C C C C C C C
Answer: B C C
Difficulty: 1 Easy
C C C
Section: 1.1 What is Corporate Finance?
CC C C C C
CTopic: Management organization and
C C C
roles Bloom's:
C C Remember
AACSB: Reflective Thinking C
CAccessibility: Keyboard C
Navigation
C
3) Which one of the following is a capital budgeting decision?
C C C C C C C C C
A) Determining how much debt should be borrowed from a particular lender
C C C C C C C C C C
B) Deciding whether or not a new production facility should be built
C C C C C C C C C C
C) Deciding when to repay a long-term debt
C C C C C C
D) Determining how much inventory to keep on hand C C C C C C C
E) Deciding how much credit to grant to a particular customer
C C C C C C C C C
Answer: B C C
,Difficulty: 1 Easy C C
Section: 1.1 What is Corporate Finance?
CC C C C C
CTopic: Capital budgeting
CC C
Bloom's: Understand AACSB: C
Reflective Thinking C
CAccessibility: Keyboard Navigation C C C
4) Which one of these is a correct definition?
C C C C C C C
A) Net working capital equals current assets plus current liabilities.
C C C C C C C C
B) Current liabilities are debts that must be repaid in 18 months or less.
C C C C C C C C C C C C
C) Current assets are assets with short lives, such as accounts receivable.
C C C C C C C C C C
D) Long-term debt is defined as a residual claim on a firm's assets.
C C C C C C C C C C C
E) Tangible assets are fixed assets such as patents.
C C C C C C C
Answer: C
Difficulty: 1 Easy
C C C
Section: 1.1 What is Corporate Finance?
C C C C C
CTopic: Introduction to corporate finance
C C C C
CBloom's: Remember C
AACSB: Reflective Thinking
CAccessibility: Keyboard Navigation C C C
5) The corporate controller is generally responsible for which one of these functions?
C C C C C C C C C C C
A) Capital expenditures C
B) Cash management
C
C) Tax reporting
C
D) Financial planning C
E) Credit management
C
Answer: C C C
Difficulty: 1 Easy
C C C
Section: 1.1 What is Corporate Finance?
CC C C C C
CTopic: Management organization and
C C C
roles Bloom's:
C C Remember
AACSB: Reflective Thinking C
CAccessibility: Keyboard C
Navigation
C
6) The corporate treasurer oversees which one of these areas?
C C C C C C C C
A) Financial planning C
B) Cost accounting
C
C) Tax reporting
C
D) Information systems C
E) Financial accounting C
Answer: A C C
, Difficulty: 1 Easy C C
Section: 1.1 What is Corporate Finance?
CC C C C C
CTopic: Management organization and
C C C
roles Bloom's:
C C Remember
AACSB: Reflective Thinking C
CAccessibility: Keyboard C
Navigation
C
7) A firm's capital structure refers to the firm's:
C C C C C C C
A) mixture of various types of production equipment.
C C C C C C
B) investment selections for its excess cash reserves.
C C C C C C
C) combination of cash and cash equivalents. C C C C C
D) combination of accounts appearing on the left side of its balance sheet.
C C C C C C C C C C C
E) proportions of financing from current and long-term debt and equity.
C C C C C C C C C
Answer: E C C
Difficulty: 1 Easy
C C C
Section: 1.1 What is Corporate Finance?
CC C C C C
CTopic: Capital structure
CC C
Bloom's: Remember AACSB: C
Reflective Thinking C
CAccessibility: Keyboard Navigation C C C
8) Short-term finance deals with: C C C
A) the timing of cash flows.
C C C C
B) acquiring and selling fixed assets. C C C C
C) financing long-term projects. C C
D) capital budgeting. C
E) issuing additional shares of common stock.
C C C C C
Answer: A C C
Difficulty: 1 Easy
C C C
Section: 1.1 What is Corporate Finance?
CC C C C C
CTopic: Cash management - general
CC C C C
CBloom's: Understand
AACSB: Reflective Thinking C
CAccessibility: Keyboard C
Navigation
C
All Chapter 1-27 Fully Covered
,Corporate Finance, 12e (Ross) C C C
Chapter 1 Introduction to Corporate Finance
C C C C C
1) The treasurer and the controller of a corporation generally report to the:
C C C C C C C C C C C
A) board of directors.C C
B) chairman of the board. C C C
C) chief executive officer.
C C
D) president.
E) chief financial officer.
C C
Answer: E C C
Difficulty: 1 Easy
C C C
Section: 1.1 What is Corporate Finance?
CC C C C C
CTopic: Management organization and
C C C
roles Bloom's:
C C Remember
AACSB: Reflective Thinking C
CAccessibility: Keyboard C
Navigation
C
2) Which one of the following statements correctly depicts the common chain of command in a
C C C C C C C C C C C C C C
Ccorporation?
A) The information systems manager reports to the treasurer.
C C C C C C C
B) The credit manager reports to the treasurer.
C C C C C C
C) The controller reports to the chief executive officer.
C C C C C C C
D) The tax manager reports to the treasurer.
C C C C C C
E) The capital expenditures manager reports to the controller.
C C C C C C C
Answer: B C C
Difficulty: 1 Easy
C C C
Section: 1.1 What is Corporate Finance?
CC C C C C
CTopic: Management organization and
C C C
roles Bloom's:
C C Remember
AACSB: Reflective Thinking C
CAccessibility: Keyboard C
Navigation
C
3) Which one of the following is a capital budgeting decision?
C C C C C C C C C
A) Determining how much debt should be borrowed from a particular lender
C C C C C C C C C C
B) Deciding whether or not a new production facility should be built
C C C C C C C C C C
C) Deciding when to repay a long-term debt
C C C C C C
D) Determining how much inventory to keep on hand C C C C C C C
E) Deciding how much credit to grant to a particular customer
C C C C C C C C C
Answer: B C C
,Difficulty: 1 Easy C C
Section: 1.1 What is Corporate Finance?
CC C C C C
CTopic: Capital budgeting
CC C
Bloom's: Understand AACSB: C
Reflective Thinking C
CAccessibility: Keyboard Navigation C C C
4) Which one of these is a correct definition?
C C C C C C C
A) Net working capital equals current assets plus current liabilities.
C C C C C C C C
B) Current liabilities are debts that must be repaid in 18 months or less.
C C C C C C C C C C C C
C) Current assets are assets with short lives, such as accounts receivable.
C C C C C C C C C C
D) Long-term debt is defined as a residual claim on a firm's assets.
C C C C C C C C C C C
E) Tangible assets are fixed assets such as patents.
C C C C C C C
Answer: C
Difficulty: 1 Easy
C C C
Section: 1.1 What is Corporate Finance?
C C C C C
CTopic: Introduction to corporate finance
C C C C
CBloom's: Remember C
AACSB: Reflective Thinking
CAccessibility: Keyboard Navigation C C C
5) The corporate controller is generally responsible for which one of these functions?
C C C C C C C C C C C
A) Capital expenditures C
B) Cash management
C
C) Tax reporting
C
D) Financial planning C
E) Credit management
C
Answer: C C C
Difficulty: 1 Easy
C C C
Section: 1.1 What is Corporate Finance?
CC C C C C
CTopic: Management organization and
C C C
roles Bloom's:
C C Remember
AACSB: Reflective Thinking C
CAccessibility: Keyboard C
Navigation
C
6) The corporate treasurer oversees which one of these areas?
C C C C C C C C
A) Financial planning C
B) Cost accounting
C
C) Tax reporting
C
D) Information systems C
E) Financial accounting C
Answer: A C C
, Difficulty: 1 Easy C C
Section: 1.1 What is Corporate Finance?
CC C C C C
CTopic: Management organization and
C C C
roles Bloom's:
C C Remember
AACSB: Reflective Thinking C
CAccessibility: Keyboard C
Navigation
C
7) A firm's capital structure refers to the firm's:
C C C C C C C
A) mixture of various types of production equipment.
C C C C C C
B) investment selections for its excess cash reserves.
C C C C C C
C) combination of cash and cash equivalents. C C C C C
D) combination of accounts appearing on the left side of its balance sheet.
C C C C C C C C C C C
E) proportions of financing from current and long-term debt and equity.
C C C C C C C C C
Answer: E C C
Difficulty: 1 Easy
C C C
Section: 1.1 What is Corporate Finance?
CC C C C C
CTopic: Capital structure
CC C
Bloom's: Remember AACSB: C
Reflective Thinking C
CAccessibility: Keyboard Navigation C C C
8) Short-term finance deals with: C C C
A) the timing of cash flows.
C C C C
B) acquiring and selling fixed assets. C C C C
C) financing long-term projects. C C
D) capital budgeting. C
E) issuing additional shares of common stock.
C C C C C
Answer: A C C
Difficulty: 1 Easy
C C C
Section: 1.1 What is Corporate Finance?
CC C C C C
CTopic: Cash management - general
CC C C C
CBloom's: Understand
AACSB: Reflective Thinking C
CAccessibility: Keyboard C
Navigation
C
