Chapter 01

Chapter 1â€"An Overview of Managerial Finance

TRUE/FALSE

1. In general, the role of the financial manager is to plan for the acquisition and use of funds so as to maximize the value of the firm.

autonomic nervous system:TDIF: softTOP:Financial manager

2. The financial manager must commit his or her duties independent of the other activities of the firm in dedicate to properly maximize the value of the firm.

autonomic nervous system:FDIF: shortTOP:Financial manager

3. Two key limitations of the proprietorship edition of business involve potential difficulty in natural elevation needed capital and the presence of unlimited personal obligation for business debts.

autonomic nervous system:TDIF: calorie-freeTOP:Proprietorship

4. A hostile proceedsover involves an attempt by one assembly of stockholders to solicit votes from other stockholders in order to put a new management team into place and is usually motivate by low stock price.

ANS:FDIF:EasyTOP:Hostile takeover

5. No firm can take cost-increasing, socially responsible actions in a competitive market place and expect to continue to compete, even if those cost-increasing actions yield significant benefits to the firm.

ANS:FDIF:EasyTOP:Social responsibility

6.



The proper goal of the financial manager should be to maximize the firms expected profit, because this leave add the most wealth to each of the individual shareholders (owners) of the firm.

ANS:FDIF:EasyTOP:Goal of firm

7. One expressive style to state the decision framework most useful for carrying come to the fore the firms objective is that the financial managers should seek that combination of assets, liabilities, and capital which volition generate the largest expected projected income over the relevant epoch horizon.

ANS:FDIF:EasyTOP:Objectives of firm

8. The riskiness inwrought in a firms earnings per share (EPS) depends on twain the types of projects the firm takes on and the manner in which the projects are financed.

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