Chapter 01 - Introduction to Corporate Finance
Chapter 01 Introduction to Corporate Finance Answer Key
Multiple Choice Questions
lowe1. The person generally directly responsible for overeing the tax management, cost accounting, financial accounting, and information system functions is the:
A. treasurer.
B. director.
C. controller.
D. chairman of the board.
E. chief executive officer.
Difficulty level: Easy
Topic: CONTROLLER
Type: DEFINITIONS
2. The person generally directly responsible for overeing the cash and credit functions,
financial planning, and capital expenditures is the:
A. treasurer.
B. director.
C. controller.
D. chairman of the board.
E. chief operations officer.
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Chapter 01 - Introduction to Corporate Finance
3. The process of planning and managing a firm's long-term investments is called:
A. working capital management.
B. financial depreciation.
C. agency cost analysis.
D. capital budgeting.
E. capital structure.
Difficulty level: Easy
Topic: CAPITAL BUDGETING
Type: DEFINITIONS
4. The mixture of debt and equity ud by a firm to finance its operations is called:
A. working capital management.
B. financial depreciation.
C. cost analysis.
D. capital budgeting.
E. capital structure.
5. The management of a firm's short-term asts and liabilities is called:
A. working capital management.
B. debt management.
C. equity management.
D. capital budgeting.
E. capital structure.
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Chapter 01 - Introduction to Corporate Finance
6. A business owned by a single individual is called a:
A. corporation.
B. sole proprietorship.
C. general partnership.
D. limited partnership.
E. limited liability company.
7. A business formed by two or more individuals who each have unlimited liability for business
debts is called a:
A. corporation.
B. sole proprietorship.
C. general partnership.
D. limited partnership.
E. limited liability company.
8. The division of profits and loss among the members of a partnership is formalized in the:
A. indemnity clau.
B. indenture contract.
C. statement of purpo.
D. partnership agreement.
E. group charter.
9. A business created as a distinct legal entity compod of one or more individuals or entities is
called a:
A. corporation.
B. sole proprietorship.
boundaryC. general partnership.
D. limited partnership.
E. unlimited liability company.
Difficulty level: Easy
Topic: CORPORATION
Type: DEFINITIONS
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Chapter 01 - Introduction to Corporate Finance
10. The corporate document that ts forth the business purpo of a firm is the:
A. indenture contract.
B. state tax agreement.
C. corporate bylaws.
D. debt charter.
E. articles of incorporation.
11. The rules by which corporations govern themlves are called:
A. indenture provisions.
B. indemnity provisions.
C. charter agreements.
D. bylaws.
E. articles of incorporation.
12. A business entity operated and taxed like a partnership, but with limited liability for the
owners, is called a:
A. limited liability company.
B. general partnership.
C. limited proprietorship.
D. sole proprietorship.
E. corporation.
13. The primary goal of financial management is to:
A. maximize current dividends per share of the existing stock.
B. maximize the current value per share of the existing stock.
C. avoid financial distress.
D. minimize operational costs and maximize firm efficiency.
E. maintain steady growth in both sales and net earnings.
14. A conflict of interest between the stockholders and management of a firm is called:
A. stockholders' liability.
B. corporate breakdown.
C. the agency problem.
D. corporate activism.
E. legal liability.
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Chapter 01 - Introduction to Corporate Finance
15. Agency costs refer to:
A. the total dividends paid to stockholders over the lifetime of a firm.
B. the costs that result from default and bankruptcy of a firm.
C. corporate income subject to double taxation.
D. the costs of any conflicts of interest between stockholders and management.
拖鞋英文
E. the total interest paid to creditors over the lifetime of the firm.
16. A stakeholder is:
A. any person or entity that owns shares of stock of a corporation.
B. any person or entity that has voting rights bad on stock ownership of a corporation.
C. a person who initially started a firm and currently has management control over the cash
flows of the firm due to his/her current ownership of company stock.
D. a creditor to whom the firm currently owes money and who conquently has a claim on the
cash flows of the firm.
E. any person or entity other than a stockholder or creditor who potentially has a claim on the
cash flows of the firm.
17. The Sarbanes Oxley Act of 2002 is intended to:
A. protect financial managers from investors.
B. not have any effect on foreign companies.
C. reduce corporate revenues.
D. protect investors from corporate abus.
ayanaE. decrea audit costs for U.S. firms.
18. 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.
19. Which one of the following statements is correct concerning the organizational structure of
a corporation?
A. The vice president of finance reports to the chairman of the board.
B. The chief executive officer reports to the board of directors.
C. The controller reports to the president.
D. The treasurer reports to the chief executive officer.
E. The chief operations officer reports to the vice president of production.
Difficulty level: Medium
Topic: ORGANIZATIONAL STRUCTURE
Type: CONCEPTS
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Chapter 01 - Introduction to Corporate Finance
20. 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 to open a new store
C. deciding when to repay a long-term debt
D. determining how much inventory to keep on hand
E. determining how much money should be kept in the checking account
21. The Sarbanes Oxley Act was enacted in:
A. 1952.
B. 1967.
C. 1998.
D. 2002.
E. 2006.
22. Since the implementation of Sarbanes-Oxley, the cost of going public in the United Statesfreedom of speech
has:
A. incread.
B. decread.
C. remained about the same.
msm是什么D. been erratic, but over time has decread.
E. It is impossible to tell since Sarbanes-Oxley compliance does not involve direct cost to the
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firm.
23. Working capital management includes decisions concerning which of the following?
I. accounts payable
brighton
II. long-term debt
III. accounts receivable
IV. inventory
A. I and II only
B. I and III only
C. II and IV only
D. I, II, and III only
老友记中英文字幕版
E. I, III, and IV only
