Test Bank For Fundamentals Of Corporate Finance 10th Canadian Edition By Ross

Chapter 01

Introduction to Corporate Finance

True / False Questions

In capital budgeting, the financial manager tries to identify investment opportunities that are worth more to the firm than they cost to acquire.
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager.
Topic: 01-04 Financial Management Decisions

The size, timing and risk of cash flows are important when evaluating a capital budgeting decision.
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager.
Topic: 01-04 Financial Management Decisions

A capital expenditure project becomes desirable when the project is worth more to the firm than the cost to acquire it.
TRUE

A capital expenditure project becomes desirable when the value of the cash flow generated by the project exceeds the project’s cost.
TRUE

Capital structure determines the least expensive sources of funds for the firm to borrow.
TRUE

Capital structure determines how much debt the firm should have in relation to its level of equity.
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 The basic types of financial management decisions and the role of the financial manager.