Test Bank For Corporate Finance 12th Edition By Ross / All (Chapter 1-27) Updated Version 2024

Test Bank for Corporate Finance 12th Edition by Ross
All Chapter 1-27 Fully Covered

,Corporate Finance, 12e (Ross)
Chapter 1 Introduction to Corporate Finance

1) The treasurer and the controller of a corporation generally report to the:
A) board of directors.
B) chairman of the board.
C) chief executive officer.
D) president.
E) chief financial officer.

Answer: E
Difficulty: 1 Easy
Section: 1.1 What is Corporate Finance?
Topic: Management organization and roles
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation

2) Which one of the following statements correctly depicts the common chain of command in a
corporation?
A) The information systems manager reports to the treasurer.
B) The credit manager reports to the treasurer.
C) The controller reports to the chief executive officer.
D) The tax manager reports to the treasurer.
E) The capital expenditures manager reports to the controller.

Answer: B
Difficulty: 1 Easy
Section: 1.1 What is Corporate Finance?
Topic: Management organization and roles
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
3) Which one of the following is a capital budgeting decision?
A) Determining how much debt should be borrowed from a particular lender
B) Deciding whether or not a new production facility should be built
C) Deciding when to repay a long-term debt
D) Determining how much inventory to keep on hand
E) Deciding how much credit to grant to a particular customer

Answer: B

,Difficulty: 1 Easy
Section: 1.1 What is Corporate Finance?
Topic: Capital budgeting
Bloom's: Understand AACSB:
Reflective Thinking
Accessibility: Keyboard Navigation

4) Which one of these is a correct definition?
A) Net working capital equals current assets plus current liabilities.
B) Current liabilities are debts that must be repaid in 18 months or less.
C) Current assets are assets with short lives, such as accounts receivable.
D) Long-term debt is defined as a residual claim on a firm's assets.
E) Tangible assets are fixed assets such as patents.

Answer: C
Difficulty: 1 Easy
Section: 1.1 What is Corporate Finance?
Topic: Introduction to corporate finance
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation

5) The corporate controller is generally responsible for which one of these functions?
A) Capital expenditures
B) Cash management
C) Tax reporting
D) Financial planning
E) Credit management

Answer: C
Difficulty: 1 Easy
Section: 1.1 What is Corporate Finance?
Topic: Management organization and roles
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
6) The corporate treasurer oversees which one of these areas?
A) Financial planning
B) Cost accounting
C) Tax reporting
D) Information systems
E) Financial accounting

Answer: A

, Difficulty:[1[Easy
Section:[[ 1.1[What[is[Corporate[Finance?[ T
opic:[ Management[organization[and[roles[
Bloom's: Remember
AACSB:
Reflective[Thinking[ Ac
cessibility:[ Keyboard[Navigation

7) A[firm's[capital[structure[refers[to[the[firm's:
A) mixture[of[various[types[of[production[equipment.
B) investment[selections[for[its[excess[cash[reserves.
C) combination[of[cash[and[cash[equivalents.
D) combination[of[accounts[appearing[on[the[left[side[of[its[balance[sheet.
E) proportions[of[financing[from[current[and[long-term[debt[and[equity.

Answer:[[ E[Difficu
lty:[1[Easy
Section:[[1.1[What[is[Corporate[Finance?[ T
opic:[[Capital[structure
Bloom's: Remember[ AACSB:
Reflective[ Thinking[ Accessibilit
y:[[ Keyboard[Navigation

8) Short-term[finance[deals[with:
A) the[timing[of[cash[flows.
B) acquiring[and[selling[fixed[assets.
C) financing[long-term[projects.
D) capital[budgeting.
E) issuing[additional[shares[of[common[stock.

Answer:[[ A[Difficu
lty:[1[Easy
Section:[[1.1[What[is[Corporate[Finance?
[ Topic:[[Cash[management[-
[general[ Bloom's: Understand
AACSB:
Reflective[Thinking[ Ac
cessibility:[ Keyboard[Navigation