lOMoAR cPSD| 3713065
Chapter 01 - Introduction to Corporate Finance lOMoAR cPSD| 3713065
Test bank for Fundamentals of Corporate Finance
10thCanadian Edition by Ross Westerfield
Corporate Finance (Harvard
University)
Test bank for Fundamentals of Corporate Finance
10thCanadian Edition by Ross Westerfield
, lOMoAR cPSD| 3713065
Chapter 01 - Introduction to Corporate Finance
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
Test bank for Fundamentals of Corporate Finance
10thCanadian Edition by Ross Westerfield
, lOMoAR cPSD| 3713065
Chapter 01 - Introduction to Corporate Finance
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
Test bank for Fundamentals of Corporate Finance
10thCanadian Edition by Ross Westerfield
, lOMoAR cPSD| 3713065
Chapter 01 - Introduction to Corporate Finance
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
Test bank for Fundamentals of Corporate Finance
10thCanadian Edition by Ross Westerfield
Chapter 01 - Introduction to Corporate Finance lOMoAR cPSD| 3713065
Test bank for Fundamentals of Corporate Finance
10thCanadian Edition by Ross Westerfield
Corporate Finance (Harvard
University)
Test bank for Fundamentals of Corporate Finance
10thCanadian Edition by Ross Westerfield
, lOMoAR cPSD| 3713065
Chapter 01 - Introduction to Corporate Finance
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
Test bank for Fundamentals of Corporate Finance
10thCanadian Edition by Ross Westerfield
, lOMoAR cPSD| 3713065
Chapter 01 - Introduction to Corporate Finance
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
Test bank for Fundamentals of Corporate Finance
10thCanadian Edition by Ross Westerfield
, lOMoAR cPSD| 3713065
Chapter 01 - Introduction to Corporate Finance
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
Test bank for Fundamentals of Corporate Finance
10thCanadian Edition by Ross Westerfield
