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Quizzes - Chapter 1- Introduction to Corporate Finance -

Westerfeld & Ross & Jaffe
Corporate Finance (Đại học Kinh tế Thành phố Hồ Chí Minh)

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Minh Le

Nhà của tôi  CF_S1(2020-2021)DH45ISB-4  Online Quizzes  Quizzes C1

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Câu hỏi 1 A business created as a distinct legal entity is called a:

Đúng
Select one:
Đạt điểm 1,0 trên
1,0 a. corporation. Correct

b. general partnership.

c. unlimited liability company.

d. limited partnership.

e. sole proprietorship.

The correct answer is: corporation.

Câu hỏi 2 A business formed by two or more individuals who each have unlimited personal liability for
Đúng all of the firm's debts is called a:

Đạt điểm 1,0 trên

Select one:
1,0
a. limited partnership.

b. sole proprietorship.

c. corporation.

d. limited liability company.

e. general partnership. Correct

The correct answer is: general partnership.

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Câu hỏi 3 A business owned by a single individual is called a:

Đúng
Select one:
Đạt điểm 1,0 trên
1,0 a. general partnership.

b. corporation.

c. limited partnership.

d. sole proprietorship. Correct

e. limited liability company.

The correct answer is: sole proprietorship.

Câu hỏi 4 A conflict of interest between the stockholders and management of a firm is referred to as
Đúng the:

Đạt điểm 1,0 trên

Select one:
1,0
a. legal liability.

b. corporate activism.

c. stockholders' liability.

d. corporate breakdown.

e. agency problem. Correct

The correct answer is: agency problem.

Câu hỏi 5 A firm's capital structure refers to the firm's:

Đúng
Select one:
Đạt điểm 1,0 trên
1,0 a. investment selections for its excess cash reserves.

b. combination of cash and cash equivalents.

c. proportions of financing from current and long-term debt and equity. Correct

d. mixture of various types of production equipment.

e. combination of accounts appearing on the left side of its balance sheet.

The correct answer is: proportions of financing from current and long-term debt and equity.

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Câu hỏi 6 Agency costs refer to:

Đúng
Select one:
Đạt điểm 1,0 trên
1,0 a. corporate income subject to double taxation.

b. the total dividends paid to stockholders over the lifetime of a firm.

c. the costs of any conflicts of interest between stockholders and management.

Correct

d. the costs that result from default and bankruptcy of a firm.

e. the total interest paid to creditors over the lifetime of the firm.

The correct answer is: the costs of any conflicts of interest between stockholders and
management.

Câu hỏi 7 Financial managers should primarily strive to:

Đúng
Select one:
Đạt điểm 1,0 trên
1,0 a. maximize the current profits of the firm.

b. maximize the current value per share of existing stock. Correct

c. maximize current market share in every market in which the firm participates.

d. minimize costs while increasing current dividends.

e. maximize current dividends even if doing so adds financial distress costs to the firm.

The correct answer is: maximize the current value per share of existing stock.

Câu hỏi 8 For a firm to create value it must:

Đúng
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Đạt điểm 1,0 trên
1,0 a. reduce its investment in fixed assets since fixed assets require the use of cash.

b. avoid the issuance of debt securities.

c. have a greater cash inflow from its stockholders than its outflow to them.

d. create more cash flow than it uses. Correct

e. avoid payments to the government so dividends can be increased.

The correct answer is: create more cash flow than it uses.

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Câu hỏi 9 The primary goal of financial management is to:

Đúng
Select one:
Đạt điểm 1,0 trên
1,0 a. avoid financial distress.

b. maintain steady growth in both sales and net earnings.

c. maximize current dividends per share of the existing stock.

d. maximize the current value per share of the existing stock. Correct

e. minimize operational costs and maximize firm efficiency.

The correct answer is: maximize the current value per share of the existing stock.

Câu hỏi 10 The process of planning and managing a firm's long-term assets is called:
Đúng
Select one:
Đạt điểm 1,0 trên
1,0 a. capital structure.

b. working capital management.

c. financial depreciation.

d. agency cost analysis.

e. capital budgeting. Correct

The correct answer is: capital budgeting.

Câu hỏi 11 The treasurer and the controller of a corporation generally report to the:
Đúng
Select one:
Đạt điểm 1,0 trên
1,0 a. chairman of the board.

b. chief financial officer. Correct

c. president.

d. board of directors.

e. chief executive officer.

The correct answer is: chief financial officer.

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Câu hỏi 12 The ultimate control of a corporation lies in the hands of the corporate:
Đúng
Select one:
Đạt điểm 1,0 trên
1,0 a. chief executive officer.

b. chairman of the board.

c. president.

d. board of directors.

e. stockholders. Correct

The correct answer is: stockholders.

Câu hỏi 13 Which one of the following actions by a financial manager creates an agency problem?
Sai
Select one:
Đạt điểm 0,0 trên
1,0 a. refusing to lower selling prices if doing so will reduce the net profits

b. increasing current costs in order to increase the market value of the stockholders'
equity

c. agreeing to pay bonuses based on the market value of the company's stock

d. refusing to borrow money when doing so will create losses for the firm Incorrect

e. agreeing to expand the company at the expense of stockholders' value

The correct answer is: agreeing to expand the company at the expense of stockholders'
value

Câu hỏi 14 Which one of the following best describes the primary advantage of being a limited partner
Đúng rather than a general partner?

Đạt điểm 1,0 trên

Select one:
1,0
a. no potential financial loss

b. ability to manage the day-to-day affairs of the business

c. greater management responsibility

d. entitlement to a larger portion of the partnership's income

e. liability for firm debts is limited to the capital invested Correct

The correct answer is: liability for firm debts is limited to the capital invested

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Câu hỏi 15 Which one of the following business types is best suited to raising large amounts of capital?
Đúng
Select one:
Đạt điểm 1,0 trên
1,0 a. sole proprietorship

b. general partnership

c. corporation Correct

d. limited partnership

e. limited liability company

The correct answer is: corporation

Câu hỏi 16 Which one of the following is a capital budgeting decision?

Đúng
Select one:
Đạt điểm 1,0 trên
1,0 a. deciding how much credit to grant to a particular customer

b. deciding whether or not a new production facility should be built Correct

c. determining how much inventory to keep on hand

d. deciding when to repay a long-term debt

e. determining how much debt should be borrowed from a particular lender

The correct answer is: deciding whether or not a new production facility should be built

Câu hỏi 17 Which one of the following statements concerning a sole proprietorship is correct?
Đúng
Select one:
Đạt điểm 1,0 trên
1,0 a. The owner can generally raise large sums of capital quite easily.

b. The legal costs to form a sole proprietorship are quite substantial.

c. The company must pay separate taxes from those paid by the owner.

d. The life of the firm is limited to the life span of the owner. Correct

e. The ownership of the firm is easy to transfer to another individual.

The correct answer is: The life of the firm is limited to the life span of the owner.

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Câu hỏi 18 Which one of these accounts is included in net working capital?
Đúng
Select one:
Đạt điểm 1,0 trên
1,0 a. common stock

b. inventory Correct

c. long-term debt

d. manufacturing equipment

e. copyright

The correct answer is: inventory

Câu hỏi 19 Which one of these best fits the description of an agency cost?
Đúng
Select one:
Đạt điểm 1,0 trên
1,0 a. the payment of interest on a firm's debts

b. the payment required for an outside audit of the firm Correct

c. the benefits received from reducing production costs per unit

d. the payment of corporate income taxes

e. increasing the dividend payments per share

The correct answer is: the payment required for an outside audit of the firm

Câu hỏi 20 Which one of these statements is correct?

Đúng
Select one:
Đạt điểm 1,0 trên
1,0 a. The value of an investment by a firm depends on the size, the timing, and the risk of
the investment's cash flows. Correct

b. All overseas operations present the same amount of risk.

c. Most investors prefer greater risk over less risk.

d. Accountants record sales and expenses after the related cash flows occur.

e. When selecting one of two projects, managers should only consider the total cash
flow from each.

The correct answer is: The value of an investment by a firm depends on the size, the timing,
and the risk of the investment's cash flows.

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