罗斯公司理财Chap001全英文题库及答案

Chapter 01 - Introduction to Corporate Finance

Chapter 01 Introduction to Corporate Finance Answer Key

Multiple Choice Questions

1. The person generally directly responsible for overseeing the tax management, cost accounting, financial accounting, and information system functions is the: A. treasurer. B. director. C. controller.

D. chairman of the board. E. chief executive officer.

Difficulty level: Easy Topic: CONTROLLER Type: DEFINITIONS

2. The person generally directly responsible for overseeing the cash and credit functions, financial planning, and capital expenditures is the: A. treasurer. B. director. C. controller.

D. chairman of the board. E. chief operations officer.

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Chapter 01 - Introduction to Corporate Finance

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

Difficulty level: Easy

Topic: CAPITAL BUDGETING Type: DEFINITIONS

4. The mixture of debt and equity used by a firm to finance its operations is called: A. working capital management. B. financial depreciation. C. cost analysis. D. capital budgeting. E. capital structure.

5. The management of a firm's short-term assets and liabilities is called: A. working capital management. B. debt management. C. equity management. D. capital budgeting. E. capital structure.

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Chapter 01 - Introduction to Corporate Finance

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

B. sole proprietorship. C. general partnership. D. limited partnership.

E. limited liability company.

7. A business formed by two or more individuals who each have unlimited liability for business debts is called a: A. corporation.

B. sole proprietorship. C. general partnership. D. limited partnership.

E. limited liability company.

8. The division of profits and losses among the members of a partnership is formalized in the: A. indemnity clause. B. indenture contract. C. statement of purpose. D. partnership agreement. E. group charter.

9. A business created as a distinct legal entity composed of one or more individuals or entities is called a:

A. corporation.

B. sole proprietorship. C. general partnership. D. limited partnership.

E. unlimited liability company.

Difficulty level: Easy Topic: CORPORATION Type: DEFINITIONS

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Chapter 01 - Introduction to Corporate Finance

10. The corporate document that sets forth the business purpose of a firm is the: A. indenture contract. B. state tax agreement. C. corporate bylaws. D. debt charter.

E. articles of incorporation.

11. The rules by which corporations govern themselves are called: A. indenture provisions. B. indemnity provisions. C. charter agreements. D. bylaws.

E. articles of incorporation.

12. A business entity operated and taxed like a partnership, but with limited liability for the owners, is called a:

A. limited liability company. B. general partnership. C. limited proprietorship. D. sole proprietorship. E. corporation.

13. The primary goal of financial management is to:

A. maximize current dividends per share of the existing stock. B. maximize the current value per share of the existing stock. C. avoid financial distress.

D. minimize operational costs and maximize firm efficiency. E. maintain steady growth in both sales and net earnings.

14. A conflict of interest between the stockholders and management of a firm is called: A. stockholders' liability. B. corporate breakdown. C. the agency problem. D. corporate activism. E. legal liability.

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Chapter 01 - Introduction to Corporate Finance

15. Agency costs refer to:

A. the total dividends paid to stockholders over the lifetime of a firm. B. the costs that result from default and bankruptcy of a firm. C. corporate income subject to double taxation.

D. the costs of any conflicts of interest between stockholders and management. E. the total interest paid to creditors over the lifetime of the firm.

16. A stakeholder is:

A. any person or entity that owns shares of stock of a corporation.

B. any person or entity that has voting rights based on stock ownership of a corporation. C. a person who initially started a firm and currently has management control over the cash flows of the firm due to his/her current ownership of company stock.

D. a creditor to whom the firm currently owes money and who consequently has a claim on the cash flows of the firm.

E. any person or entity other than a stockholder or creditor who potentially has a claim on the cash flows of the firm.

17. The Sarbanes Oxley Act of 2002 is intended to: A. protect financial managers from investors. B. not have any effect on foreign companies. C. reduce corporate revenues.

D. protect investors from corporate abuses. E. decrease audit costs for U.S. firms.

18. The treasurer and the controller of a corporation generally report to the: A. board of directors. B. chairman of the board. C. chief executive officer. D. president.

E. chief financial officer.

19. Which one of the following statements is correct concerning the organizational structure of

a corporation?

A. The vice president of finance reports to the chairman of the board. B. The chief executive officer reports to the board of directors. C. The controller reports to the president.

D. The treasurer reports to the chief executive officer.

E. The chief operations officer reports to the vice president of production.

Difficulty level: Medium

Topic: ORGANIZATIONAL STRUCTURE Type: CONCEPTS

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Chapter 01 - Introduction to Corporate Finance

54. Accounting profits and cash flows are:

A. generally the same since they reflect current laws and accounting standards.

B. generally the same since accounting profits reflect when the cash flows are received.

C. generally not the same since GAAP allows for revenue recognition separate from the receipt of cash flows.

D. generally not the same because cash inflows occur before revenue recognition. E. Both c and d.

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