Test Bank for Fundamentals of Corporate Finance, 13th Edition by Stephen Ross
Solution Manual For Corporate Finance 13th Edition By Stephen Ross Randolph Westerfield Jeffrey Jaffe.
Test Bank for Fundamentals of Corporate Finance 10th Edition by Ross
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Test Bank, Instructors Manual & Solution
Manual for Fundamentals Of Corporate
Finance 10th Edition (Canadian Edition) By
Stephen Ross
1-1
, Chapter 01
Introduction to Corporate Finance
True / False Questions
1. In capital budgeting, the financial manager tries to identify investment opportunities that
are worth more to the firm than they cost to acquire.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager.
Topic: 01-04 Financial Management Decisions
2. The size, timing and risk of cash flows are important when evaluating a capital budgeting
decision.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager.
Topic: 01-04 Financial Management Decisions
3. A capital expenditure project becomes desirable when the project is worth more to the firm
than the cost to acquire it.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager.
Topic: 01-04 Financial Management Decisions
1-2
,4. A capital expenditure project becomes desirable when the value of the cash flow generated
by the project exceeds the project's cost.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager.
Topic: 01-04 Financial Management Decisions
5. Capital structure determines the least expensive sources of funds for the firm to borrow.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager.
Topic: 01-04 Financial Management Decisions
6. Capital structure determines how much debt the firm should have in relation to its level of
equity.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager.
Topic: 01-04 Financial Management Decisions
7. Capital structure determines the level of current assets that is required to maintain the firm's
operational level.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager.
Topic: 01-04 Financial Management Decisions
1-3
, 8. Capital structure determines how much risk is associated with the future cash flows of a
project.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager.
Topic: 01-04 Financial Management Decisions
9. Determining when a supplier should be paid is a capital structure decision.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager.
Topic: 01-04 Financial Management Decisions
10. Establishing the accounts receivable policies is a capital structure decision.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager.
Topic: 01-04 Financial Management Decisions
11. Determining the amount of money to borrow to finance a 10-year project is a capital
structure decision.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager.
Topic: 01-04 Financial Management Decisions
1-4
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