Exam 19: Recognizing the Basics of Financial Management

Petro Canada seeks to obtain a loan from a commercial bank in order to build an additional oil rig. Which type of financing is this?

All of the following would be reflected in a company's operating budget EXCEPT which one?

In deciding whether to approve a loan for Grewal Properties, the lender evaluates the company's financial ability to meet its credit obligations and make regular loan payments. Which of the 5 C's of credit does this represent?

Joe's Plumbing purchases a vanity, toilet, shower enclosure, faucets, and plumbing supplies for a major bathroom renovation job. Joe has to pay the supplier but does not expect to be paid by the customer until he has completed the job. This is an example of which of the following?

What is it called when a company takes delivery of goods but pays for them at a later time?

Adelaide appears on Dragons' Den and asks the investors for $120,000 in return for a 15% stake in her company. Jim Treliving really likes her product but offers her $120,000 in return for a 25% stake in her company. What is Jim's probable reasoning for this offer?

Which "C" of the 5 C's of credit would consider the real estate, inventory, equipment or other assets that the borrower can pledge as security for a loan?

Which of the following is NOT a characteristic of short-term financing?

What is the movement of money into and out of an organization called?

Which of the following are property, inventory, or assets pledged as security for the repayment of a loan?

Which of the following is the lowest rate charged by banks for short-term loans?

Disadvantages of debt financing over equity financing include all of the following EXCEPT which one?

Tyson Foods considers a loan to cover the purchase of a new piece of equipment. Typically Tyson finances these types of purchases over 10 years. What is Tyson's key consideration in determining which type of financing to obtain?

Which of the following is NOT a type of budget used by corporations in their financial planning process?

Thom has a culinary supply business. He orders pots and pans from a manufacturer and takes delivery. However, he has up to 10 days to pay the invoice without interest or penalty. This is an example of which of the following?

Which form of short-term financing is similar to a credit card in that you have a maximum credit limit you can borrow against at any time and you pay interest only on the amount of funds you have used?

Which "C" of the 5 C's of credit considers the borrower's assets or the net worth of the borrower?

In order to obtain a short-term loan from the bank, Dillon Foods must pledge its inventory as security. In this scenario, the inventory serves as which of the following for the loan?

What are all of the activities concerned with obtaining money and using it effectively called?

As a way to cover their short-term financial needs, Smith & Welling CPAs have access to a fixed amount of funds from their bank they can borrow as needed. Which of the following does this exemplify?