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Bus 286 | corporate finance Test-Bank-for-Business-Finance,-11th-Edition--Peirson
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Bus 286 | corporate finance Test-Bank-for-Business-Finance,-11th-Edition--Peirson
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Solution Manual for Business Finance 11th Edition By Eddie McLaney
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lOMoAR cPSD| 11924639Bus 286 | corporate finance
Test-Bank-for-Business-Finance,-
11th-Edition--Peirson
ull file at http://gettestbank.eu/Test-Bank-for-Business-Finance,-11th-Edition--Peirson
Downloaded by Edmund Soh (edmund.soh.es@gmail.com)
, lOMoAR cPSD| 11924639
1 Key
1. Corporate finance can be described as decisions made by:
A. equity market investors.
B. potential debt holders.
C. company directors and management.
D. financial analysts.
AACSB: Analytic
Blooms: Knowledge
Difficulty: Easy
EQUIS: Apply knowledge
Graduate Attributes: Problem-solving
Learning Objective: 01-02 Identify the major decisions made by financial managers and investors
Peirson - Chapter 01 #1
Section: 1.1 Finance as an area of study
2. In corporate finance, the financing and investment decisions are related to questions concerning:
A. how to generate profits and expand operations.
B. how to reduce costs and survive.
C. how to acquire and employ or invest funds.
D. all of the given options.
AACSB: Analytic
Blooms: Knowledge
Difficulty: Easy
EQUIS: Apply knowledge
Graduate Attributes: Problem-solving
Learning Objective: 01-04 Specify the objective of the company
Peirson - Chapter 01 #2
Section: 1.4 The companys financial objective
3. Corporate decisions include:
A. investment decisions.
B. financing decisions.
C. dividend decisions.
D. all of the given options.
AACSB: Analytic
Blooms: Knowledge
Difficulty: Easy
EQUIS: Apply knowledge
Graduate Attributes: Problem-solving
Learning Objective: 01-02 Identify the major decisions made by financial managers and investors
Peirson - Chapter 01 #3
Section: 1.1 Finance as an area of study
4. When formulating financial policy, managers also have to consider the appropriate balance between:
A. receivables and payables.
B. interim and final dividends.
C. short-term and medium-term finance.
D. short-term and long-term finance.
AACSB: Analytic
Blooms: Knowledge
Difficulty: Easy
EQUIS: Apply knowledge
Graduate Attributes: Problem-solving
Learning Objective: 01-02 Identify the major decisions made by financial managers and investors
Peirson - Chapter 01 #4
Section: 1.2 Financial decisions
ull file at http://gettestbank.eu/Test-Bank-for-Business-Finance,-11th-Edition--Peirson
Downloaded by Edmund Soh (edmund.soh.es@gmail.com)
, lOMoAR cPSD| 11924639
5. The ultimate objective of investment and financing decisions is to maximise:
A. the number of projects the company is invested in.
B. the amount added to the value of the owner's wealth.
C. the salaries of all employees of the firm.
D. the repayments that are made of debt.
AACSB: Analytic
Blooms: Knowledge
Difficulty: Easy
EQUIS: Apply knowledge
Graduate Attributes: Problem-solving
Learning Objective: 01-04 Specify the objective of the company
Peirson - Chapter 01 #5
Section: 1.4 The companys financial objective
6. Many small service businesses, retail stores and professional practices are operated as:
A. joint ventures.
B. partnerships.
C. sole proprietorships.
D. limited liability firms.
AACSB: Analytic
Blooms: Knowledge
Difficulty: Easy
EQUIS: Apply knowledge
Graduate Attributes: Problem-solving
Learning Objective: 01-03 Identify the major types of business entities
Peirson - Chapter 01 #6
Section: 1.3 Business structures
7. Which of the following is not one of the three major types of business structures in Australia:
A. dealership.
B. sole proprietorship.
C. limited liability company.
D. partnership.
AACSB: Analytic
Blooms: Knowledge
Difficulty: Easy
EQUIS: Apply knowledge
Graduate Attributes: Problem-solving
Learning Objective: 01-03 Identify the major types of business entities
Peirson - Chapter 01 #7
Section: 1.3 Business structures
8. The concept of arbitrage involves:
A. buying a share and selling it later when it increases in value
B. simultaneous transactions in different markets that result in an immediate risk-free profit.
C. agreeing on a price to buy or sell a security for in the future.
D. buying a higher quality good for a cheaper price than is offered for a similar lower quality item.
AACSB: Analytic
Blooms: Knowledge
Difficulty: Easy
EQUIS: Apply knowledge
Graduate Attributes: Problem-solving
Learning Objective: 01-05 Identify and explain the fundamental concepts in finance
Peirson - Chapter 01 #8
Section: 1.5 Fundamental concepts in finance
9. The principle that a dollar is worth more the sooner it is to be received is the:
A. value principle.
B. value of money principle.
C. time value of money principle.
D. Fisher effect.
AACSB: Analytic
Blooms: Knowledge
Difficulty: Easy
EQUIS: Apply knowledge
Graduate Attributes: Problem-solving
Learning Objective: 01-05 Identify and explain the fundamental concepts in finance
Peirson - Chapter 01 #9
Section: 1.5 Fundamental concepts in finance
ull file at http://gettestbank.eu/Test-Bank-for-Business-Finance,-11th-Edition--Peirson
Downloaded by Edmund Soh (edmund.soh.es@gmail.com)
, lOMoAR cPSD| 11924639
10. The interest rate quoted in the financial markets for borrowing and lending transactions is the:
A. real interest rate.
B. prime lending rate.
C. nominal interest rate.
D. cash rate.
AACSB: Analytic
Blooms: Knowledge
Difficulty: Easy
EQUIS: Apply knowledge
Graduate Attributes: Problem-solving
Learning Objective: 01-05 Identify and explain the fundamental concepts in finance
Peirson - Chapter 01 #10
Section: 1.5 Fundamental concepts in finance
11. The concept of market efficiency means that we should expect securities and other assets to be:
A. underpriced given their expected risks and returns.
B. overpriced given their expected risks and returns.
C. fairly priced given their expected risks and returns.
D. none of the given options is correct as prices cannot be predicted.
AACSB: Analytic
Blooms: Knowledge
Difficulty: Easy
EQUIS: Apply knowledge
Graduate Attributes: Problem-solving
Learning Objective: 01-05 Identify and explain the fundamental concepts in finance
Peirson - Chapter 01 #11
Section: 1.5 Fundamental concepts in finance
12. An investment decision is distinct from a financing decision in that:
Afinancing decisions consider which is the best investment to undertake, while investment decisions
. consider the list of possible investments that can be made.
Binvestment decisions are about deciding on which new investments should be undertaken, and
. reviewing past investments, while financing decisions consider how to fund the capital needs of the
investment program.
C.investment decisions relate to reviewing past investment programs, while financing decisions relate
to funding new investments.
D financing decisions relate to choices about the firm's financial asset base, while investment
. decisions relate to choices about physical assets.
AACSB: Analytic
Blooms: Knowledge
Difficulty: Easy
EQUIS: Apply knowledge
Graduate Attributes: Problem-solving
Learning Objective: 01-05 Identify and explain the fundamental concepts in finance
Peirson - Chapter 01 #12
Section: 1.5 Fundamental concepts in finance
13. Partnerships are a common form of business entity for small service businesses because:
A. they provide legal protection for the proprietor from the creditors of the firm.
B. they are ideal for where the business is owned by one person.
C. there are no legal requirements that need to be met to form a partnership.
D. they allow the company to buy, own and sell property.
AACSB: Analytic
Blooms: Knowledge
Difficulty: Easy
EQUIS: Apply knowledge
Graduate Attributes: Problem-solving
Learning Objective: 01-03 Identify the major types of business entities
Peirson - Chapter 01 #13
Section: 1.3 Business structures
ull file at http://gettestbank.eu/Test-Bank-for-Business-Finance,-11th-Edition--Peirson
Downloaded by Edmund Soh (edmund.soh.es@gmail.com)
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