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Fundamentals of Corporate Finance 9e

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Fundamentals of Corporate Finance 9e
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Chapter 01 - Introduction to Corporate Finance

Chapter 01 Introduction to Corporate Finance Answer Key

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 structure Refer to section 1.1

AACSB: N/A Difficulty: Basic Learning 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 structure Refer to section 1.1

AACSB: N/A Difficulty: Basic Learning Objective: 1-1 Section: 1.1 Topic: Capital structure

1-20

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Chapter 01 - Introduction to Corporate Finance

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 structure Refer to section 1.1

AACSB: N/A Difficulty: Basic Learning 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 Learning Objective: 1-3 Section: 1.2 Topic: Sole proprietorship

1-21

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Chapter 01 - Introduction to Corporate Finance

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 Learning Objective: 1-3 Section: 1.2 Topic:

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