Fundamentals of Corporate Finance, 7th Canadian Edition A. Brealey, C. Myers, J. Marcus, Mitra, Gajurel 2020 Test Bank
Fundamentals of Corporate Finance
( Test Bank)
Fundamentals of Corporate Finance, 7th Canadian Edition A. Brealey, C. Myers, J. Marcus, Mitra, Gajurel 2020 Test Bank
Edition: 7th Canadian
Author Name: A. Brealey, C. Myers, J. Marcus, Mitra, Gajurel
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Chapter 01
Goals and Governance of the Firm
True / False Questions
- To obtain the necessary money a company sells financial assets or securities.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Distinguish between real and financial assets.
Topic: 01-03 The Financing Decision
- The liability of sole proprietors is limited to the amount of their investment in the company.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-03 Cite some of the advantages and disadvantages of organizing a business as a corporation.
Topic: 01-06 Sole Proprietorships
- General partners have limited personal liability for business debts in a limited partnership.
FALSE
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-03 Cite some of the advantages and disadvantages of organizing a business as a corporation.
Topic: 01-07 Partnerships
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- The corporate form of business organization is often accompanied by separation of ownership and management.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-03 Cite some of the advantages and disadvantages of organizing a business as a corporation.
Topic: 01-04 What Is a Corporation?
- A major disadvantage of partnerships is that they have “double taxation” of profits.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-03 Cite some of the advantages and disadvantages of organizing a business as a corporation.
Topic: 01-07 Partnerships
- Capital budgeting decisions are used to determine how to raise the cash necessary for investments.
FALSE
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-01 Give examples of the investment and financing decisions that financial managers make.
Learning Objective: 01-02 Distinguish between real and financial assets.
Topic: 01-02 The Investment (Capital Budgeting) Decision
- As your firm grows, you may decide to form a corporation. You may incorporate your firm federally, under the Canadian Business Corporation Act, or provincially, under the relevant provincial laws.
TRUE
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-03 Cite some of the advantages and disadvantages of organizing a business as a corporation.
Topic: 01-04 What Is a Corporation?
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