Test Bank
Finance: Applications And Theory
By Marcia Millon Cornett
2025 release
,Table of contents
Part one: introduction
1 introduction to financial management
Part two: financial statements
2 reviewing financial statements
appendix 2a: various formats for financial statements (available in connect)
3 analyzing financial statements
Part three: valuing of future cash flows 118
4 time value of money 1: analyzing single cash flows
5 time value of money 2: analyzing annuity cash flows
Part four: valuing of bonds and stocks 188
6 understanding financial markets and institutions
appendix 6a: the financial crisis: the failure of financial institution specialness (available in connect)
7 valuing bonds
8 valuing stocks
Part five: risk and return
9 characterizing risk and return
10 estimating risk and return
Part six: capital budgeting
11 calculating the cost of capital
12 estimating cash flows on capital budgeting projects
appendix 12a: macrs depreciation tables
13 weighing net present value and other capital budgeting criteria
Part seven: working capital management and financial planning
14 working capital management and policies
appendix 14a: the cash budget
15 financial planning and forecasting
Part eight: capital structure issues
16 assessing long-term debt, equity, and capital structure
17 sharing firm wealth: dividends, share repurchases, and other payouts
18 issuing capital and the investment banking process
Part nine: other topics in finance
19 international corporate finance
20 mergers and acquisitions and financial distress
,Test bank for
Finance applications and theory 6e cornett
Chapter 1-20 answers are at the end of each chapter
Chapter 1
Student name:
Which statements(s) is/are true for successful application of financial theories?
The economy will be more productive.
Individual’s wealth will grow.
The economy will be more productive and individual's wealth will grow.
None of these choices are correct.
Not all cash a company generates will be returned to the investors. Which of the following
will not reduce the amount of capital returned to the investors?
Retained earnings
Taxes
Dividends
This subarea of finance involves methods and techniques to make appropriate decisions about
what kinds of securities to own, which firms' securities to buy, and how to be paid back in the
form that the investor wishes.
Real markets
Investments
Financial management
This subarea of finance looks at firm decisions in acquiring and utilizing cash received from
investors or from retained earnings.
Investments
Financial management
Financial institutions and markets
, Financial management involves decisions about which of the following?
Which projects to fund
How to minimize taxation
What type of capital should be raised
All of these choices are correct.
This subarea of finance helps facilitate the capital flows between investors and companies.
Investments
Financial management
Treasury management
Financial institutions and markets
This subarea of finance is important for adapting to the global economy.
Investments
Financial management
International finance
Financial institutions and markets
A potential future negative impact to value and/or cash flows is often discussed in terms of
probability of loss and the expected magnitude of the loss. This is called
Options.
Standard deviation.
Coefficient of variation.
Risk.
This is a term to describe non-physical assets like stocks and bonds that get their value from
future cash flows.
Investment
Financial asset
Real asset
Financial markets
Finance: Applications And Theory
By Marcia Millon Cornett
2025 release
,Table of contents
Part one: introduction
1 introduction to financial management
Part two: financial statements
2 reviewing financial statements
appendix 2a: various formats for financial statements (available in connect)
3 analyzing financial statements
Part three: valuing of future cash flows 118
4 time value of money 1: analyzing single cash flows
5 time value of money 2: analyzing annuity cash flows
Part four: valuing of bonds and stocks 188
6 understanding financial markets and institutions
appendix 6a: the financial crisis: the failure of financial institution specialness (available in connect)
7 valuing bonds
8 valuing stocks
Part five: risk and return
9 characterizing risk and return
10 estimating risk and return
Part six: capital budgeting
11 calculating the cost of capital
12 estimating cash flows on capital budgeting projects
appendix 12a: macrs depreciation tables
13 weighing net present value and other capital budgeting criteria
Part seven: working capital management and financial planning
14 working capital management and policies
appendix 14a: the cash budget
15 financial planning and forecasting
Part eight: capital structure issues
16 assessing long-term debt, equity, and capital structure
17 sharing firm wealth: dividends, share repurchases, and other payouts
18 issuing capital and the investment banking process
Part nine: other topics in finance
19 international corporate finance
20 mergers and acquisitions and financial distress
,Test bank for
Finance applications and theory 6e cornett
Chapter 1-20 answers are at the end of each chapter
Chapter 1
Student name:
Which statements(s) is/are true for successful application of financial theories?
The economy will be more productive.
Individual’s wealth will grow.
The economy will be more productive and individual's wealth will grow.
None of these choices are correct.
Not all cash a company generates will be returned to the investors. Which of the following
will not reduce the amount of capital returned to the investors?
Retained earnings
Taxes
Dividends
This subarea of finance involves methods and techniques to make appropriate decisions about
what kinds of securities to own, which firms' securities to buy, and how to be paid back in the
form that the investor wishes.
Real markets
Investments
Financial management
This subarea of finance looks at firm decisions in acquiring and utilizing cash received from
investors or from retained earnings.
Investments
Financial management
Financial institutions and markets
, Financial management involves decisions about which of the following?
Which projects to fund
How to minimize taxation
What type of capital should be raised
All of these choices are correct.
This subarea of finance helps facilitate the capital flows between investors and companies.
Investments
Financial management
Treasury management
Financial institutions and markets
This subarea of finance is important for adapting to the global economy.
Investments
Financial management
International finance
Financial institutions and markets
A potential future negative impact to value and/or cash flows is often discussed in terms of
probability of loss and the expected magnitude of the loss. This is called
Options.
Standard deviation.
Coefficient of variation.
Risk.
This is a term to describe non-physical assets like stocks and bonds that get their value from
future cash flows.
Investment
Financial asset
Real asset
Financial markets
