fundamentals of corporate finance 11th canadian edition By Stephen A. Ross Test bank
B) Deciding whether 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.
93) Which of the following is not a duty of a financial manager?"
A) Deciding how much interest to pay the holders of the corporation's bonds.
B) Deciding the mix of long-term debt and equity.
C) Deciding which projects a firm should undertake.
D) Deciding how much short-term debt to use.
E) Deciding on the optimal product mix to sell.
94) The best definition of agency problem is:
A) The possibility of conflicts between shareholders and management in a large corporation.
B) The process of planning and managing a firm's long-term investments.
C) Determining the optimal mix of internal and external board of directors.
D) The purchase or sale of securities whose value derives from the price of another, underlying, asset.
E) Determining who should be the agent of corporate executives.
95) The primary purpose of capital budgeting is to:
A) Determine the amount of cash and inventory to keep on hand.
B) Estimate the initial cost of a project.
C) Distinguish projects that have at least a five-year life from those that don't.
D) Determine the risk level of a project.
E) Identify projects that produce cash flows that exceed the cost of the project.
96) Cash flow from a firm's operations can be:
A) Reinvested to other companies.
B) Paid out as interest.
C) Distributed to bondholders.
D) Invested in money market funds.
E) Reinvested back in the company.
97) Which of the following are disadvantages of the partnership form of ownership?
A) Personal liability and double taxation.
B) Personal liability and limited firm life.
C) Double taxation and limited firm life.
D) Ease of formation and unlimited firm life.
E) Ease of formation and ease of ownership transfer.
98) Which of the following is considered a benefit of the corporate form of organization?
A) Ease of the transfer of ownership.
B) Limited life.
C) Double taxation.
D) Ease of reporting.
E) Ease of entry into stock exchange.
99) In a general partnership: