Fundamentals of Financial Management, Third Edition

OBJECTIVE-TYPE QUESTIONS

1. Mark true or false.
   1. The capital budgeting and long-term investment decision are synonymous.
   2. Short-term capital provides greater liquidity than long-term capital.
   3. Dividend policy takes into account the decision on retention of earnings for the purpose of profitable investment.
   4. State regulation influences the nature of a firm’s financial decisions.
   5. The concept of profit maximisation takes into account the long-term returns on capital invested.
   6. Corporate wealth is the sum of the value of total assets and the present value of the wealth created through the assets.
2. Choose the most suitable answer.
   1. Corporate financial decisions are based on:
      1. microeconomic factors only
      2. macroeconomic factors only
      3. both micro-and macroeconomic ...