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Fundamentals of corporate finance2c 8e

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PAGE # 1 Fundamentals of Corporate Finance, 8/e Solved McQs PAGE # 2 Introduction to Corporate Finance 1 When evaluating a project in which a firm might invest, both the size and the timing of the cash flows are important. A) B) True False 2 Milo, Inc. spends approximately $3 million annually to hire auditors to review the firm's financial statements. This is an example of an indirect agency cost. A) B) True False 3 The board of directors has the power to act on behalf of the shareholders to hire and fire the operating management of a firm. In a legal sense, the directors are "principals" and the shareholders are "agents." A) B) True False 4 The vice-president of finance generally reports directly to the chairman of the board. A) B) True False 5 A manager in charge of working capital determines: A) B) C) D) E) 6 how to raise the money required to fund a project. how much inventory a firm should maintain. how many additional shares of stock should be sold. which projects a firm should undertake. which fixed assets a firm should purchase. PAGE # 3 Which one of the following is the best description of the goal of a financial manager in a corporation where shares are publicly traded? A) B) C) D) E) maximize sales growth over the short-term maximize profits over the short-term avoid financial distress maintain steady earnings growth maximize the current value per share of the existing stock 7 The duties of a financial manager include determining: I. II. III. IV. ...
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