Test Bank all Chapter, Answer at the end of

Corporate Finance, 1st (Asia Global Edition) 1e Stephen Ross, Randolph, Westerfield, JeffreyJaffe, Josep Lim Ruth, Tan Helen Wong

(Test Bank all Chapter, Answer at the end of each Chapter)

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1-1 Chapter 01 Introduction to Corporate Finance

Multiple Choice Questions

• The person generally directly responsible for overseeing the tax management, cost

accounting, financial accounting, and information system functions is the:

• treasurer.
• director.
• controller.
• chairman of the board.
• chief executive officer.

• The person generally directly responsible for overseeing the cash and credit functions,

financial planning, and capital expenditures is the:

• treasurer.
• director.
• controller.
• chairman of the board.
• chief operations officer.

• The process of planning and managing a firm's long-term investments is called:
• working capital management.
• financial depreciation.
• agency cost analysis.
• capital budgeting.
• capital structure.

• The mixture of debt and equity used by a firm to finance its operations is called:
• working capital management.
• financial depreciation.
• cost analysis.
• capital budgeting.
• capital structure.
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Chapter 01 - Introduction to Corporate Finance 1-2

5. The management of a firm's short-term assets and liabilities is called:

• working capital management.
• debt management.
• equity management.
• capital budgeting.
• capital structure.

6. A business owned by a single individual is called a:

• corporation.
• sole proprietorship.
• general partnership.
• limited partnership.
• limited liability company.

• A business formed by two or more individuals who each have unlimited liability for business

debts is called a:

• corporation.
• sole proprietorship.
• general partnership.
• limited partnership.
• limited liability company.

• The division of profits and losses among the members of a partnership is formalized in the:
• indemnity clause.
• indenture contract.
• statement of purpose.
• partnership agreement.
• group charter.
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Chapter 01 - Introduction to Corporate Finance 1-3

• A business created as a distinct legal entity composed of one or more individuals or entities is

called a:

• corporation.
• sole proprietorship.
• general partnership.
• limited partnership.
• unlimited liability company.

• The corporate document that sets forth the business purpose of a firm is the:
• indenture contract.
• state tax agreement.
• corporate bylaws.
• debt charter.
• articles of incorporation.

11. The rules by which corporations govern themselves are called:

• indenture provisions.
• indemnity provisions.
• charter agreements.
• bylaws.
• articles of incorporation.

• A business entity operated and taxed like a partnership, but with limited liability for the

owners, is called a:

• limited liability company.
• general partnership.
• limited proprietorship.
• sole proprietorship.
• corporation.
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