Test Bank Fundamentals of Corporate Finance, 2nd Edition Jonathan Berk A+
- From Business, General Business
- NUMBER1TUTOR
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Description
1.1 Why Study Finance?
1) The Valuation Principle shows how to make the costs and benefits of a decision comparable so that we can evaluate them properly.
Answer: TRUE
Diff: 1
Skill: Conceptual
Author: DS
Question Status: Previous Edition
2) Financial decisions require that you weigh alternatives in strictly monetary terms.
Answer: FALSE
Diff: 1
Skill: Conceptual
Author: DS
Question Status: Revised
3) Which of the following best describes why the Valuation Principle is a key concept in making financial decisions?
A) It shows how to assign monetary value to intangibles such as good health and well-being.
B) It allows fixed assets and liquid assets to be valued correctly.
C) It gives a good indication of the net worth of a person, item, or company and can be used to estimate any changes in that net worth.
D) It shows how to make the costs and benefits of a decision comparable so that we can weigh them