Fundamentals of Corporate Finance 9e

82683 Words Oct 14th, 2012 331 Pages
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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
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I, II, III, and IV Refer to section 1.1

AACSB: N/A Difficulty: Basic Learning Objective: 1-1 Section: 1.1 Topic: Financial management

1-24

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Chapter 01 - Introduction to Corporate Finance

11. Which one of the following functions should be the responsibility of the controller rather than the treasurer? A. daily cash deposit B. income tax returns C. equipment purchase analysis D. customer credit approval E. payment to a vendor Refer to section 1.1

AACSB: N/A Difficulty: Basic Learning Objective: 1-1 Section: 1.1 Topic: Financial management

12. The controller of a corporation generally reports directly to the: A. board of directors. B. chairman of the board. C. chief executive officer. D. president. E. vice president of finance. Refer to section 1.1

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

1-25

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Chapter 01 - Introduction to Corporate Finance

13. Which one of the following correctly defines the upward chain of command in a typical corporate organizational structure? A. The vice president of finance reports to the chairman of the board. B. The chief executive officer reports to president. C. The controller reports to the president. D. The treasurer reports to the vice president of finance. E. The chief operations officer reports to the vice president of production. Refer to section 1.1

AACSB: N/A Difficulty: Basic Learning
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