Question 1

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

Accepted Answer

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

Question 2

A major concern for firms selling on credit is:

Accepted Answer

A) the inability to utilize factoring as a source of financing. 
B) the resulting increase in the debt ratio for the firm. 
C) the realization that many credit customers never pay their bills. 
D) not all firms accept credit cards. 
A) the inability to utilize factoring as a source of financing. 
B) the resulting increase in the debt ratio for the firm. 
C) the realization that many credit customers never pay their bills. 
D) not all firms accept credit cards.

Question 3

A revolving credit agreement is designed to reduce the risk of lending money.

Accepted Answer

A) True 
 B)False

Question 4

describes the short-term financing available to firms that buy merchandise from their suppliers and are not required to pay for their purchase until some future date.

Accepted Answer

A) Revolving credit 
B) Factoring 
C) Secured credit 
D) Trade credit 
A) Revolving credit 
B) Factoring 
C) Secured credit 
D) Trade credit

Question 5

refers to the process that identifies variances by comparing actual revenues and expenses to projected revenues and expenses.

Accepted Answer

A) Financial planning 
B) Forecasting 
C) Financial control 
D) Factor analysis 
A) Financial planning 
B) Forecasting 
C) Financial control 
D) Factor analysis

Question 6

The most difficult kind of loan to obtain from a bank is a secured loan.

Accepted Answer

A) True 
 B)False

Question 7

Inability to attract and retain qualified employees is one of the most common ways for a firm to fail financially.

Accepted Answer

A) True 
 B)False

Question 8

One important consideration for a firm accepting funds from a venture capitalist is the ownership interest demanded by the venture capital firm.

Accepted Answer

A) True 
 B)False

Question 9

Effective financial managers carefully review customer credit histories to decrease inventory costs.

Accepted Answer

A) True 
 B)False

Question 10

Identify and describe three types of short-term financing.

Accepted Answer

Students may mention that short-term fin

Question 11

A promissory note is a written contract with a promise that one party will pay a specified amount to another party.

Accepted Answer

A) True 
 B)False

Question 12

Efficient cash management requires firms to pay their bills as quickly as possible,and delay the collection of accounts receivable.

Accepted Answer

A) True 
 B)False

Question 13

The managers of Dakoti Clothing regularly compare their actual profits with the firm's projected profits.When deviations occur,the managers use the feedback to take corrective action when necessary.The management of Dakoti Clothing is exercising financial:

Accepted Answer

A) control. 
B) budgeting. 
C) derivatives. 
D) planning. 
A) control. 
B) budgeting. 
C) derivatives. 
D) planning.

Question 14

Which of the following highlights a firm's spending plans for the purchase of major assets?

Accepted Answer

A) Operating budget 
B) Capital budget 
C) Cash budget 
D) Surplus budget 
A) Operating budget 
B) Capital budget 
C) Cash budget 
D) Surplus budget

Question 15

Deltoid Aluminum uses its stock of unsold aluminum products as collateral for short term loans.This arrangement represents:

Accepted Answer

A) secured loan. 
B) unsecured loans. 
C) revolving credit agreements. 
D) factoring. 
A) secured loan. 
B) unsecured loans. 
C) revolving credit agreements. 
D) factoring.

Question 16

A term-loan agreement requires the borrower to repay the loan in one lump sum at the end of the loan period.

Accepted Answer

A) True 
 B)False

Question 17

The interest paid for debt financing is a tax deductible expense for the firm.

Accepted Answer

A) True 
 B)False

Question 18

Category Development,a leader in residential housing,recently negotiated a financing arrangement with TD Bank.The short-term funding agreement guarantees a specified amount of funds would be made available upon Category Development's request.This arrangement represents a:

Accepted Answer

A) contingency reserve. 
B) pledging agreement. 
C) revolving credit agreement. 
D) line of credit. 
A) contingency reserve. 
B) pledging agreement. 
C) revolving credit agreement. 
D) line of credit.

Question 19

Which of these is backed only by the reputation of the issuer?

Accepted Answer

A) Venture capital 
B) Debenture bonds 
C) Secured bonds 
D) Long-term financing 
A) Venture capital 
B) Debenture bonds 
C) Secured bonds 
D) Long-term financing

Question 20

Financial managers are responsible for the design and implementation of an organization's marketing function.

Accepted Answer

A) True 
 B)False

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

A major concern for firms selling on credit is:

A revolving credit agreement is designed to reduce the risk of lending money.

describes the short-term financing available to firms that buy merchandise from their suppliers and are not required to pay for their purchase until some future date.

refers to the process that identifies variances by comparing actual revenues and expenses to projected revenues and expenses.

The most difficult kind of loan to obtain from a bank is a secured loan.

Inability to attract and retain qualified employees is one of the most common ways for a firm to fail financially.

One important consideration for a firm accepting funds from a venture capitalist is the ownership interest demanded by the venture capital firm.

Effective financial managers carefully review customer credit histories to decrease inventory costs.

Identify and describe three types of short-term financing.

A promissory note is a written contract with a promise that one party will pay a specified amount to another party.

Efficient cash management requires firms to pay their bills as quickly as possible,and delay the collection of accounts receivable.

The managers of Dakoti Clothing regularly compare their actual profits with the firm's projected profits.When deviations occur,the managers use the feedback to take corrective action when necessary.The management of Dakoti Clothing is exercising financial:

Which of the following highlights a firm's spending plans for the purchase of major assets?

Deltoid Aluminum uses its stock of unsold aluminum products as collateral for short term loans.This arrangement represents:

A term-loan agreement requires the borrower to repay the loan in one lump sum at the end of the loan period.

The interest paid for debt financing is a tax deductible expense for the firm.

Category Development,a leader in residential housing,recently negotiated a financing arrangement with TD Bank.The short-term funding agreement guarantees a specified amount of funds would be made available upon Category Development's request.This arrangement represents a:

Which of these is backed only by the reputation of the issuer?

Financial managers are responsible for the design and implementation of an organization's marketing function.

The Dynamic Business Environment

How Economic Issues Affect Business

Competing in Global Markets

The Role of Government in Business Appendix a Working Within the Legal Environment of Business

Ethics and Social Responsibility

Forms of Business Ownership

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Producing World-Class Goods and Services

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employeemdashmanagement Issues and Relations

Marketing: Helping Buyers Buy

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

Understanding Accounting and Financial Information

The Financial Services Industry in Canada

Filters

Exam 17: Financial Management Appendix C Managing Risk

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

A major concern for firms selling on credit is:

A revolving credit agreement is designed to reduce the risk of lending money.

describes the short-term financing available to firms that buy merchandise from their suppliers and are not required to pay for their purchase until some future date.

refers to the process that identifies variances by comparing actual revenues and expenses to projected revenues and expenses.

The most difficult kind of loan to obtain from a bank is a secured loan.

Inability to attract and retain qualified employees is one of the most common ways for a firm to fail financially.

One important consideration for a firm accepting funds from a venture capitalist is the ownership interest demanded by the venture capital firm.

Effective financial managers carefully review customer credit histories to decrease inventory costs.

Identify and describe three types of short-term financing.

A promissory note is a written contract with a promise that one party will pay a specified amount to another party.

Efficient cash management requires firms to pay their bills as quickly as possible,and delay the collection of accounts receivable.

The managers of Dakoti Clothing regularly compare their actual profits with the firm's projected profits.When deviations occur,the managers use the feedback to take corrective action when necessary.The management of Dakoti Clothing is exercising financial:

Which of the following highlights a firm's spending plans for the purchase of major assets?

Deltoid Aluminum uses its stock of unsold aluminum products as collateral for short term loans.This arrangement represents:

A term-loan agreement requires the borrower to repay the loan in one lump sum at the end of the loan period.

The interest paid for debt financing is a tax deductible expense for the firm.

Category Development,a leader in residential housing,recently negotiated a financing arrangement with TD Bank.The short-term funding agreement guarantees a specified amount of funds would be made available upon Category Development's request.This arrangement represents a:

Which of these is backed only by the reputation of the issuer?

Financial managers are responsible for the design and implementation of an organization's marketing function.

The Dynamic Business Environment

How Economic Issues Affect Business

Competing in Global Markets

The Role of Government in Business Appendix a Working Within the Legal Environment of Business

Ethics and Social Responsibility

Forms of Business Ownership

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Producing World-Class Goods and Services

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employeemdashmanagement Issues and Relations

Marketing: Helping Buyers Buy

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

Understanding Accounting and Financial Information

The Financial Services Industry in Canada

Filters