Financial Management Principles and Applications 8th Edition By Sheridan Titman test bank
Titman, Financial Management: Principles and Applications, 8th edition
Chapter 1: Getting started—Principles of finance
Multiple choice: Choose the one alternative that best completes the statement or answers the question
Which of the following statements best represents what finance is about?
The study of how political, social and economic forces affect corporations
Maximising profits
The study of how people and businesses make investment decisions and how to finance those decisions
Reducing risk
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: C
From a financial point of view, a company that decides to develop a new product is making [blank].
a financing decision
an investment decision
a capital structure decision
a cash flow decision
Difficulty: Basic
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: B
Working capital management refers to [blank].
long-term financing decisions
the management of cash flows
investing in product development
capital structure
Difficulty: Basic
AACSB: 7. Application of knowledge
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: B
A key component of finance is the management and interpretation of [blank].
marketing managers
accounting staff
entrepreneurship
information
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: D
According to the authors, the personal decision to take a year off from work to obtain a graduate degree in business is primarily a(n) [blank] decision.
social
financial
ethical
investment
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: D
The area of finance that deals with long-term investment decisions is known as [blank].
capital structure
working capital management
financial strategy
capital budgeting
Difficulty: Basic
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: D
Capital structure refers to the financing of long-term investments.
True
False
Difficulty: Basic
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: A
Financial decisions can be difficult because the cost of investments can be estimated with greater confidence than future payoffs.
True
False
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: A
Short answer: Write the word or phrase that best completes each statement or answers the question
What are the three basic questions addressed by the study of investments?
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives and identify the three primary business decisions that financial managers make
Answer:
1. What investments should the firm undertake?
2. How should the firm fund these investments?
3. How can the firm best manage cash flows in its day-to-day operations?
Multiple choice: Choose the one alternative that best completes the statement or answers the question
Sole proprietorships are often used at which stage of a firm’s life?
After a partnership
At the early stages
As the number of employees increases
When the company goes public
Difficulty: Moderate
AACSB: 6. Reflective thinking
Chapter 1: Getting started—Principles of finance
Multiple choice: Choose the one alternative that best completes the statement or answers the question
Which of the following statements best represents what finance is about?
The study of how political, social and economic forces affect corporations
Maximising profits
The study of how people and businesses make investment decisions and how to finance those decisions
Reducing risk
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: C
From a financial point of view, a company that decides to develop a new product is making [blank].
a financing decision
an investment decision
a capital structure decision
a cash flow decision
Difficulty: Basic
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: B
Working capital management refers to [blank].
long-term financing decisions
the management of cash flows
investing in product development
capital structure
Difficulty: Basic
AACSB: 7. Application of knowledge
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: B
A key component of finance is the management and interpretation of [blank].
marketing managers
accounting staff
entrepreneurship
information
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: D
According to the authors, the personal decision to take a year off from work to obtain a graduate degree in business is primarily a(n) [blank] decision.
social
financial
ethical
investment
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: D
The area of finance that deals with long-term investment decisions is known as [blank].
capital structure
working capital management
financial strategy
capital budgeting
Difficulty: Basic
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: D
Capital structure refers to the financing of long-term investments.
True
False
Difficulty: Basic
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: A
Financial decisions can be difficult because the cost of investments can be estimated with greater confidence than future payoffs.
True
False
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives, and identify the three primary business decisions that financial managers make
Answer: A
Short answer: Write the word or phrase that best completes each statement or answers the question
What are the three basic questions addressed by the study of investments?
Difficulty: Moderate
AACSB: 6. Reflective thinking
Learning Objective: 1.1 Understand the importance of finance in your personal and professional lives and identify the three primary business decisions that financial managers make
Answer:
1. What investments should the firm undertake?
2. How should the firm fund these investments?
3. How can the firm best manage cash flows in its day-to-day operations?
Multiple choice: Choose the one alternative that best completes the statement or answers the question
Sole proprietorships are often used at which stage of a firm’s life?
After a partnership
At the early stages
As the number of employees increases
When the company goes public
Difficulty: Moderate
AACSB: 6. Reflective thinking