Exam (elaborations)
Fundamentals of Corporate Finance 10Th Ed by Dick Brealey - Test Bank
- Course
- Institution
- Book
Test Bank For Fundamentals of Corporate Finance 10Th Ed by Dick Brealey
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
More summaries for
-
SOLUTIONS MANUAL for Fundamentals of Corporate Finance 10th Edition by Richard Brealey, Stewart Myers and Alan Marcu s | Complete 21 Chapters
-
Complete Solution Manual Fundamentals of Corporate Finance 10th Edition Brealey Questions & Answers with rationales (Chapter 1-25)
-
Complete Test Bank Fundamentals of Corporate Finance 10th Edition Brealey Questions & Answers with rationales (Chapter 1-24)
Seller
Follow
ExamsExpert
Reviews received
Content preview
,Fundamentals of Corporate Finance, 10e (Brealey)Chapter 1 Goals and Governance of the Corporation
1) The liability of sole proprietors is limited to the amount of their investment in the company.
Answer: FALSE
Difficulty: 1 Easy
Topic: Forms of business organization
Learning Objective: 01-03 Cite some of the advantages and disadvantages of organizing a
business as a corporation.
Bloom's: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
2) General partners have limited personal liability for business debts in a limited partnership.
Answer: FALSE
Difficulty: 1 Easy
Topic: Forms of business organization
Learning Objective: 01-03 Cite some of the advantages and disadvantages of organizing a
business as a corporation.
Bloom's: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
3) The separation of ownership and management is one distinctive feature of corporations.
Answer: TRUE
Difficulty: 1 Easy
Topic: Forms of business organization
Learning Objective: 01-03 Cite some of the advantages and disadvantages of organizing a
business as a corporation.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
1
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
,4) A major disadvantage of partnerships is that they have double taxation of profits.
Answer: FALSE
Difficulty: 1 Easy
Topic: Forms of business organization
Learning Objective: 01-03 Cite some of the advantages and disadvantages of organizing a
business as a corporation.
Bloom's: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
5) Financial assets have value because they are claims on the firm's real assets and the cash that
those assets will produce.
Answer: TRUE
Difficulty: 1 Easy
Topic: Financial management decisions
Learning Objective: 01-02 Distinguish between real and financial assets.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
6) Capital budgeting decisions are used to determine how to raise the cash necessary for
investments.
Answer: FALSE
Difficulty: 2 Medium
Topic: Financial management decisions
Learning Objective: 01-01 Give examples of the investment and financing decisions that
financial managers make.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
7) A successful investment is one that increases the value of the firm.
Answer: TRUE
Difficulty: 2 Medium
Topic: Goal of financial management
Learning Objective: 01-01 Give examples of the investment and financing decisions that
financial managers make.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
2
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
, 8) Facebook's decision to spend $700 million to acquire Instagram is an investment decision.
Answer: TRUE
Difficulty: 1 Easy
Topic: Financial management decisions
Learning Objective: 01-01 Give examples of the investment and financing decisions that
financial managers make.
Bloom's: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
9) Boards of directors are generally appointed by the firm's senior officers.
Answer: FALSE
Difficulty: 1 Easy
Topic: Management organization and roles
Learning Objective: 01-03 Cite some of the advantages and disadvantages of organizing a
business as a corporation.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
10) Financial analysts are involved in monitoring the risk associated with investment projects
and financing decisions.
Answer: TRUE
Difficulty: 2 Medium
Topic: Management organization and roles
Learning Objective: 01-04 Describe the responsibilities of the CFO, treasurer; and controller.
Bloom's: Remember
AACSB: Communication
Accessibility: Keyboard Navigation
11) The primary goal of any company should be to maximize current period profits.
Answer: FALSE
Difficulty: 2 Medium
Topic: Goal of financial management
Learning Objective: 01-05 Explain why maximizing market value is the natural financial goal of
the corporation.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
3
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ExamsExpert. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $30.07. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
62890 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now