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1. Corporations that do not issue financial securities such as stock or debt obligations:

may not be able to generate sufficient funds to fulfill their needs.

Which of the following would be considered a capital budgeting decision

Deciding to expand into a new line of products, at a cost of $5 million

budgeting decision must decide whether to:

buy new machinery or repair the old

4. The best criterion for success in a capital budgeting decision would be to:

maximize the difference between cash inflows and cost

5. The overall goal of capital budgeting projects should be to:

increase the wealth of the firm's shareholders.

6. An example of a firm's financing decision would be:

issuing 10-year versus 20-year bonds.

Which of the following is not a financing decision?

Should the firm shut down an unprofitable factory?

Long-term financing arrangements occur in the

Capital markets

Firms can alter their capital structure by:

issuing stock to repay debt.

When a corporation decides to issue long-term debt in order to pay for the acquisition of real assets, it has made a:

financing decision.

11. A firm decides to pay for a small investment project through a $1 million increase in short-term bank loans. This is best described as an example of a(n):

financing decision.

12. The short-term decisions of financial managers are comprised of

both investment and financing decisions

13. Which of the following represents a financing decision

A decision to borrow $10 million through a bank loan