Test Bank for CFIN7 7th Edition by Scott Besley, Eugene Brigham
ISBN-13: 5150
Full Chapters test bank includes Multiple choice questions and True false
Chapter 1. An Overview of Managerial Finance
1-1. What Is Finance?
1-1a. General Areas of Finance
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Indicate whether the statement is true or false.
1. In a competitive marketplace, "good ethics" is a wonderful idea but an impractical standard, because there are
simply too few benefits to be gained from maintaining high business ethics.
a. True
b. False
2. In general, the role of a financial manager is to plan for the acquisition and use of funds so as to maximize the
value of the firm.
a. True
b. False
3. The corporate charter is a document filed with the secretary of the state in which a firm is incorporated that
provides information about the corporation, including its name, address, directors, and amount of capital stock.
a. True
b. False
4. A proprietorship is an unincorporated business owned by one individual and the owner benefits from the limited
liability for business, which limits personal losses to what the proprietor has invested in the company.
a. True
b. False
5. Incentive compensation plans are used to attract and retain top managerial talent as well as to align the interests
of management with shareholders.
a. True
b. False
6. If a firm's managers want to maximize stock price, it is in their best interests to operate efficient, low-cost plants,
develop new and safe products that consumers want, and maintain good relationships with customers, suppliers,
creditors, and the communities in which they operate.
a. True
b. False
7. A financial manager's task is to make decisions concerning the acquisition and use of funds for the greatest
benefit of the firm.
a. True
b. False
8. Cultural differences do not impact the multinational corporations as they expand into different geographic regions.
a. True
b. False
9. Exchange rate risk is the risk that the cash flows from a foreign project will be worth less than those same cash
flows denominated in the parent company's home currency.
a. True
b. False
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