TEST BANK FOR FOUNDATIONS OF FINANCIAL
MANAGEMENT, 18TH EDITION BY STANLEY
BLOCK, GEOFFREY HIRT, BARTLEY DANIELSEN
2026 A+
1
,TABLES OF CONTENTS
PART 1: INTRODUCTION
1. The Goals and Activities of Financial Management
PART 2: FINANCIAL ANALYSIS AND PLANNING
2. Review of Accounting
3. Financial Analysis
4. Financial Forecasting
5. Operating and Financial Leverage
PART 3: WORKING CAPITAL MANAGEMENT
6. Working Capital and the Financing Decision
7. Current Asset Management
8. Sources of Short-Term Financing
PART 4: THE CAPITAL BUDGETING PROCESS
9. The Time Value of Money
10. Valuation and Rates of Return
11. Cost of Capital
12. The Capital Budgeting Decision
13. Risk and Capital Budgeting
PART 5: LONG-TERM FINANCING
14. Capital Markets
15. Investment Banking
16. Long-Term Debt and Lease Financing
17. Common and Preferred Stock Financing
18. Dividend Policy and Retained Earnings
19. Convertibles, Warrants, and Derivatives
PART 6: EXPANDING THE PERSPECTIVE OF CORPORATE FINANCE
20. External Growth through Mergers
21. International Financial Management
2
,Foundations Of Financial Management, 18TH EDITION (Block)
Chapter 1 The Goals And Activities Of Financial Management
1) As Finance Emerged As A New Field, Much Emphasis Was Placed On Mergers And Acquisitions.
ANS: TRUE Difficulty:
1 Easy
Topic: Introduction To Corporate Finance
Learning Objective: 01-01 The Field Of Finance Integrates Concepts From Economics, Accounting,
And A Number Of Other Areas.
Bloom's: Remember AACSB:
Reflective Thinking
Accessibility: Keyboard Navigation
2) Inflation Is Assumed To Be A Temporary Problem That Does Not Affect Financial Decisions.
ANS: FALSE
Difficulty: 1 Easy
Topic: Financial Management Decisions
Learning Objective: 01-01 The Field Of Finance Integrates Concepts From Economics, Accounting,
And A Number Of Other Areas.
Bloom's: Remember AACSB:
Reflective Thinking
Accessibility: Keyboard Navigation
3) Financial Capital Is Composed Of Long-Term Plant And Equipment, As Well As Other
Tangible Investments.
ANS: FALSE
Difficulty: 1 Easy
Topic: Introduction To Corporate Finance
Learning Objective: 01-01 The Field Of Finance Integrates Concepts From Economics, Accounting,
And A Number Of Other Areas.
Bloom's: Remember AACSB:
Reflective Thinking
Accessibility: Keyboard Navigation
4) Real Capital Is Composed Of Long-Term Plant And Equipment.
ANS: TRUE Difficulty:
1 Easy
Topic: Introduction To Corporate Finance
Learning Objective: 01-01 The Field Of Finance Integrates Concepts From Economics, Accounting,
3
, And A Number Of Other Areas.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
5) During The 1930s, Financial Practice Revolved Around Such Topics As The Preservation Of Capital,
Maintenance Of Liquidity, The Reorganization Of Financially Troubled Corporations, And Bankruptcy.
ANS: TRUE Difficulty:
1 Easy
Topic: Introduction To Corporate Finance
Learning Objective: 01-01 The Field Of Finance Integrates Concepts From Economics, Accounting,
And A Number Of Other Areas.
Bloom's: Remember AACSB:
Reflective Thinking
Accessibility: Keyboard Navigation
6) In The Mid 1950s, Finance Began To Change To A More Analytical, Decision-Oriented Approach.
ANS: TRUE Difficulty:
1 Easy
Topic: Introduction To Corporate Finance
Learning Objective: 01-01 The Field Of Finance Integrates Concepts From Economics, Accounting,
And A Number Of Other Areas.
Bloom's: Remember AACSB:
Reflective Thinking
Accessibility: Keyboard Navigation
7) Recently, The Emphasis Of Financial Management Has Been On The Relationship Between Risk
And Return.
ANS: TRUE Difficulty:
1 Easy
Topic: Introduction To Corporate Finance
Learning Objective: 01-01 The Field Of Finance Integrates Concepts From Economics, Accounting,
And A Number Of Other Areas.; 01-03 The Relationship Of Risk To Return Is A Central Focus Of
Finance. Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
8) The First Nobel Prizes Given To Finance Professors Were For Their Contributions To
Capital Structure Theory And Portfolio Theories Of Risk And Return.
ANS: TRUE Difficulty:
4
MANAGEMENT, 18TH EDITION BY STANLEY
BLOCK, GEOFFREY HIRT, BARTLEY DANIELSEN
2026 A+
1
,TABLES OF CONTENTS
PART 1: INTRODUCTION
1. The Goals and Activities of Financial Management
PART 2: FINANCIAL ANALYSIS AND PLANNING
2. Review of Accounting
3. Financial Analysis
4. Financial Forecasting
5. Operating and Financial Leverage
PART 3: WORKING CAPITAL MANAGEMENT
6. Working Capital and the Financing Decision
7. Current Asset Management
8. Sources of Short-Term Financing
PART 4: THE CAPITAL BUDGETING PROCESS
9. The Time Value of Money
10. Valuation and Rates of Return
11. Cost of Capital
12. The Capital Budgeting Decision
13. Risk and Capital Budgeting
PART 5: LONG-TERM FINANCING
14. Capital Markets
15. Investment Banking
16. Long-Term Debt and Lease Financing
17. Common and Preferred Stock Financing
18. Dividend Policy and Retained Earnings
19. Convertibles, Warrants, and Derivatives
PART 6: EXPANDING THE PERSPECTIVE OF CORPORATE FINANCE
20. External Growth through Mergers
21. International Financial Management
2
,Foundations Of Financial Management, 18TH EDITION (Block)
Chapter 1 The Goals And Activities Of Financial Management
1) As Finance Emerged As A New Field, Much Emphasis Was Placed On Mergers And Acquisitions.
ANS: TRUE Difficulty:
1 Easy
Topic: Introduction To Corporate Finance
Learning Objective: 01-01 The Field Of Finance Integrates Concepts From Economics, Accounting,
And A Number Of Other Areas.
Bloom's: Remember AACSB:
Reflective Thinking
Accessibility: Keyboard Navigation
2) Inflation Is Assumed To Be A Temporary Problem That Does Not Affect Financial Decisions.
ANS: FALSE
Difficulty: 1 Easy
Topic: Financial Management Decisions
Learning Objective: 01-01 The Field Of Finance Integrates Concepts From Economics, Accounting,
And A Number Of Other Areas.
Bloom's: Remember AACSB:
Reflective Thinking
Accessibility: Keyboard Navigation
3) Financial Capital Is Composed Of Long-Term Plant And Equipment, As Well As Other
Tangible Investments.
ANS: FALSE
Difficulty: 1 Easy
Topic: Introduction To Corporate Finance
Learning Objective: 01-01 The Field Of Finance Integrates Concepts From Economics, Accounting,
And A Number Of Other Areas.
Bloom's: Remember AACSB:
Reflective Thinking
Accessibility: Keyboard Navigation
4) Real Capital Is Composed Of Long-Term Plant And Equipment.
ANS: TRUE Difficulty:
1 Easy
Topic: Introduction To Corporate Finance
Learning Objective: 01-01 The Field Of Finance Integrates Concepts From Economics, Accounting,
3
, And A Number Of Other Areas.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
5) During The 1930s, Financial Practice Revolved Around Such Topics As The Preservation Of Capital,
Maintenance Of Liquidity, The Reorganization Of Financially Troubled Corporations, And Bankruptcy.
ANS: TRUE Difficulty:
1 Easy
Topic: Introduction To Corporate Finance
Learning Objective: 01-01 The Field Of Finance Integrates Concepts From Economics, Accounting,
And A Number Of Other Areas.
Bloom's: Remember AACSB:
Reflective Thinking
Accessibility: Keyboard Navigation
6) In The Mid 1950s, Finance Began To Change To A More Analytical, Decision-Oriented Approach.
ANS: TRUE Difficulty:
1 Easy
Topic: Introduction To Corporate Finance
Learning Objective: 01-01 The Field Of Finance Integrates Concepts From Economics, Accounting,
And A Number Of Other Areas.
Bloom's: Remember AACSB:
Reflective Thinking
Accessibility: Keyboard Navigation
7) Recently, The Emphasis Of Financial Management Has Been On The Relationship Between Risk
And Return.
ANS: TRUE Difficulty:
1 Easy
Topic: Introduction To Corporate Finance
Learning Objective: 01-01 The Field Of Finance Integrates Concepts From Economics, Accounting,
And A Number Of Other Areas.; 01-03 The Relationship Of Risk To Return Is A Central Focus Of
Finance. Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
8) The First Nobel Prizes Given To Finance Professors Were For Their Contributions To
Capital Structure Theory And Portfolio Theories Of Risk And Return.
ANS: TRUE Difficulty:
4
