Exam 17: Financial Management Appendix C Managing Risk

As a financial manager for a large manufacturing firm,Gail evaluates the purchase of expensive machinery and construction of new facilities.She is analyzing capital expenditure proposals.

The business functions of accounting and finance are often in conflict with each other.

represent major investments in long-term assets such as land,buildings, and trademarks.

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.

Many sellers offer a 2% discount to a buyer that makes payment 20 days before the due date, (2/10,net 30).Firms that fail to take advantage of this early payment discount are losing approximately 36%.

Inadequate expense control typically occurs as a result of undercapitalization.

Some suppliers hesitate to offer trade credit to firms with a poor credit history.In these cases,the supplier may insist that the customer sign a(n):

The interest paid on______ financing represents a tax deductible business expense.