Question 1

A ________ refers to a line of credit that is guaranteed by the bank.

Accepted Answer

A) collateral trust fund 
B) revolving credit agreement 
C) contract credit agreement 
D) commercial credit agreement 
A) collateral trust fund 
B) revolving credit agreement 
C) contract credit agreement 
D) commercial credit agreement B

Question 2

Sound financial management involves determining the most appropriate sources of funds to meet the short-term and long-term needs of an organization.

Accepted Answer

A) True 
 B)False  True

Question 3

Debt financing exclusively provides funds to satisfy short-term financing needs.

Accepted Answer

A) True 
 B)False  False

Question 4

When Libertine Industries renegotiated their loan agreement,they borrowed an additional $2 million.The new loan requires Libertine to repay the new amount in nine months.Liberty's activity represents ________ financing.

Accepted Answer

A) equity 
B) debt 
C) revitalized 
D) secured 
A) equity 
B) debt 
C) revitalized 
D) secured

Question 5

Capital expenditures are major investments in long-term assets such as equipment,and trademarks.

Accepted Answer

A) True 
 B)False

Question 6

Financial managers generally oppose credit sales because of the impact on cash flows.

Accepted Answer

A) True 
 B)False

Question 7

Tax payments represent a cash inflow to a firm.

Accepted Answer

A) True 
 B)False

Question 8

Corporations that issue debenture bonds are required to provide collateral.

Accepted Answer

A) True 
 B)False

Question 9

Typically,only highly regarded customers of a bank receive:

Accepted Answer

A) secured loans. 
B) bank premiums. 
C) unsecured loans. 
D) commercial paper. 
A) secured loans. 
B) bank premiums. 
C) unsecured loans. 
D) commercial paper.

Question 10

As the chief financial officer (CFO)for a medium-sized service company,Shelley is concerned about the possibility of temporary cash shortages.Given the irregular cash flows from seasonal sales,she wants to ensure that her company's bank will provide adequate funds to cover any potential cash flow problem.The best strategy to ease Shelley's concern would be to arrange a revolving credit agreement with the bank.

Accepted Answer

A) True 
 B)False

Question 11

A loan that requires the borrower to provide collateral represents a:

Accepted Answer

A) bond trust. 
B) debenture loan. 
C) unsecured loan. 
D) secured loan. 
A) bond trust. 
B) debenture loan. 
C) unsecured loan. 
D) secured loan.

Question 12

___________ offer short-term secured loans to high-risk borrowers.

Accepted Answer

A) Commercial finance companies HYPERLINK "" 
B) Reserve banks 
C) Credit brokers 
D) Investment bankers 
A) Commercial finance companies HYPERLINK "" 
B) Reserve banks 
C) Credit brokers 
D) Investment bankers

Question 13

Maple Leaf Innovations is planning to purchase a sophisticated supercomputer in the next year that will cost over $43,000,000.This purchase would be included in Maple Leaf's capital budget.

Accepted Answer

A) True 
 B)False

Question 14

Short-term financing refers to borrowed funds that will be repaid in a year or less.

Accepted Answer

A) True 
 B)False

Question 15

Manitoba Supply offers their customers trade credit with terms 2/15 net 30.This implies that:

Accepted Answer

A) Manitoba's customers have very little incentive to pay within the discount period. 
B) paying within 30 days will let a customer deduct 15% off the invoice price. 
C) most customers will pay their bill within 2 days in order to take the maximum discount. 
D) the annual financing cost of failing to pay within 15 days is about 48%. 
A) Manitoba's customers have very little incentive to pay within the discount period. 
B) paying within 30 days will let a customer deduct 15% off the invoice price. 
C) most customers will pay their bill within 2 days in order to take the maximum discount. 
D) the annual financing cost of failing to pay within 15 days is about 48%.

Question 16

If a buyer is offered the terms of sale of "3/10,net 30" this means that the buyer can receive a 10 percent discount by making full payment within 3 days of the billing date.

Accepted Answer

A) True 
 B)False

Question 17

What is the overall objective of financial planning?

Accepted Answer

The overall objective of finan

Question 18

Which of the following would not normally involve long-term financing?

Accepted Answer

A) Worker's salaries 
B) Plant expansion 
C) Purchase of modern equipment 
D) Purchase of a large tract of land 
A) Worker's salaries 
B) Plant expansion 
C) Purchase of modern equipment 
D) Purchase of a large tract of land

Question 19

Explain the role the operating budget,the capital budget,and the cash budget play in financial planning.

Accepted Answer

An operating budget is the projection of

Question 20

Managing a firm's resources so that it can meet its goals and objectives is the goal of financial accounting.

Accepted Answer

A) True 
 B)False

A ________ refers to a line of credit that is guaranteed by the bank.

Sound financial management involves determining the most appropriate sources of funds to meet the short-term and long-term needs of an organization.

Debt financing exclusively provides funds to satisfy short-term financing needs.

When Libertine Industries renegotiated their loan agreement,they borrowed an additional $2 million.The new loan requires Libertine to repay the new amount in nine months.Liberty's activity represents ________ financing.

Capital expenditures are major investments in long-term assets such as equipment,and trademarks.

Financial managers generally oppose credit sales because of the impact on cash flows.

Tax payments represent a cash inflow to a firm.

Corporations that issue debenture bonds are required to provide collateral.

Typically,only highly regarded customers of a bank receive:

A loan that requires the borrower to provide collateral represents a:

___________ offer short-term secured loans to high-risk borrowers.

Maple Leaf Innovations is planning to purchase a sophisticated supercomputer in the next year that will cost over $43,000,000.This purchase would be included in Maple Leaf's capital budget.

Short-term financing refers to borrowed funds that will be repaid in a year or less.

Manitoba Supply offers their customers trade credit with terms 2/15 net 30.This implies that:

If a buyer is offered the terms of sale of "3/10,net 30" this means that the buyer can receive a 10 percent discount by making full payment within 3 days of the billing date.

What is the overall objective of financial planning?

Which of the following would not normally involve long-term financing?

Explain the role the operating budget,the capital budget,and the cash budget play in financial planning.

Managing a firm's resources so that it can meet its goals and objectives is the goal of financial accounting.

Taking Risks and Making Profits Within the Dynamic Business Environment

How Economic Issues Affect Business

Competing in Global Markets

The Role of Government in Business

Ethics and Social Responsibility

Forms of Business Ownership

Entrepreneurship and Starting a Small Business

Management and Leadership

Adapting Organizations to Todays Markets

Producing World-Class Goods and Services

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Understanding Employeemanagement Issues and Relations

Marketing: Building Customer and Stakeholder Relationships

Managing the Marketing Mix: Product, Price, Place, and Promotion

Understanding Accounting and Financial Information

The Financial Services Industry in Canada

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Exam 17: Financial Management

A ________ refers to a line of credit that is guaranteed by the bank.

Sound financial management involves determining the most appropriate sources of funds to meet the short-term and long-term needs of an organization.

Debt financing exclusively provides funds to satisfy short-term financing needs.

When Libertine Industries renegotiated their loan agreement,they borrowed an additional $2 million.The new loan requires Libertine to repay the new amount in nine months.Liberty's activity represents ________ financing.

Capital expenditures are major investments in long-term assets such as equipment,and trademarks.

Financial managers generally oppose credit sales because of the impact on cash flows.

Tax payments represent a cash inflow to a firm.

Corporations that issue debenture bonds are required to provide collateral.

Typically,only highly regarded customers of a bank receive:

A loan that requires the borrower to provide collateral represents a:

___________ offer short-term secured loans to high-risk borrowers.

Maple Leaf Innovations is planning to purchase a sophisticated supercomputer in the next year that will cost over $43,000,000.This purchase would be included in Maple Leaf's capital budget.

Short-term financing refers to borrowed funds that will be repaid in a year or less.

Manitoba Supply offers their customers trade credit with terms 2/15 net 30.This implies that:

If a buyer is offered the terms of sale of "3/10,net 30" this means that the buyer can receive a 10 percent discount by making full payment within 3 days of the billing date.

What is the overall objective of financial planning?

Which of the following would not normally involve long-term financing?

Explain the role the operating budget,the capital budget,and the cash budget play in financial planning.

Managing a firm's resources so that it can meet its goals and objectives is the goal of financial accounting.

Taking Risks and Making Profits Within the Dynamic Business Environment

How Economic Issues Affect Business

Competing in Global Markets

The Role of Government in Business

Ethics and Social Responsibility

Forms of Business Ownership

Entrepreneurship and Starting a Small Business

Management and Leadership

Adapting Organizations to Todays Markets

Producing World-Class Goods and Services

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Understanding Employeemanagement Issues and Relations

Marketing: Building Customer and Stakeholder Relationships

Managing the Marketing Mix: Product, Price, Place, and Promotion

Understanding Accounting and Financial Information

The Financial Services Industry in Canada

Filters