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Stephen Ross, Randolph Westerfield, Jeffrey Jaffe,
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Bradford Jordan All Chapters Complete
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,Chapter 01 Introduction to Corporate Finance Answer Key
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Multiple=Choice=Questions
1. Which=one=of=the=following=terms=is=defined=as=the=management=of=a=firm's=long-
= term=investments?
A. working=capital=management
B. financial=allocation
C. agency=cost=analysis
D.= capital=budgeting
E.= capital= structu
re=Refer=to= sectio
n=1.1
AACSB:=N/A
Difficulty:=Basic= Learn
ing=Objective:=1-1
Section:=1.1
Topic:=Capital=budgeting
2. Which=one=of=the=following=terms=is=defined=as=the=mixture=of=a=firm's=debt=and
= equity=financing?
A. working=capital=management
B. cash=management
C. cost=analysis
D. capital=budgeting
E.= capital= structu
re=Refer=to= sectio
n=1.1
AACSB:=N/A
Difficulty:=Basic= Learn
ing=Objective:=1-1
Section:=1.1
Topic:=Capital=structure
,3. Which=one=of=the=following=is=defined=as=a=firm's=short-term=assets=and=its=short-
= term=liabilities?
A. working=capital
B. debt
C. investment=capital
D. net=capital
E. capital= structu
re=Refer=to= sectio
n=1.1
AACSB:=N/A
Difficulty:=Basic= Learn
ing=Objective:=1-1
Section:=1.1
Topic:=Working=capital
4. A=business=owned=by=a=solitary=individual=who=has=unlimited=liability=for=its=debt=is
= called=a:
A. corporation.
B.=sole=proprietorship.
C. general=partnership.
D. limited=partnership.
E. limited=liability=company.
= Refer=to=section=1.2
AACSB:=N/A
Difficulty:=Basic= Learn
ing=Objective:=1-3
Section:=1.2
Topic:=Sole=proprietorship
, 5. A=business=formed=by=two=or=more=individuals=who=each=have=unlimited=liability=for
= all=of=the=firm's=business=debts=is=called=a:
A. corporation.
B. sole=proprietorship.
C.= general=partnership.
D. limited=partnership.
E. limited=liability=company.
= Refer=to=section=1.2
AACSB:=N/A
Difficulty:=Basic= Learni
ng=Objective:=1-3
Section:=1.2
Topic:=General=partnership
6. A=business=partner=whose=potential=financial=loss=in=the=partnership=will=not=exceed
= his=or=her=investment=in=that=partnership=is=called=a:
A. generally=partner.
B. sole=proprietor.
C.= limited=partner.
D. corporate=shareholder.
E. zero=partner.= Re
fer=to=section=1.2
AACSB:=N/A
Difficulty:=Basic= Learni
ng=Objective:=1-3
Section:=1.2
Topic:=Limited=partner