Question 1

Many small businesses rely on factoring as a source of short-term financing because:

Accepted Answer

A) loans provided by factors do not require collateral. 
B) small firms often find it difficult to qualify for bank loans. 
C) interest paid to a factor qualifies for a tax credit. 
D) factoring provides a much cheaper source of funds than bank loans. 
A) loans provided by factors do not require collateral. 
B) small firms often find it difficult to qualify for bank loans. 
C) interest paid to a factor qualifies for a tax credit. 
D) factoring provides a much cheaper source of funds than bank loans.

Question 2

Retained earnings represent a source of equity financing.

Accepted Answer

A) True 
 B)False

Question 3

Only financially stable firms are able to sell commercial paper to raise short-term funds.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is the most popular way of raising cash among small businesses?

Accepted Answer

A) factoring 
B) line of credit 
C) revolving credit agreement 
D) commercial paper 
A) factoring 
B) line of credit 
C) revolving credit agreement 
D) commercial paper

Question 5

A firm's short-term financial forecast provides an estimate of sales.

Accepted Answer

A) True 
 B)False

Question 6

To secure financing for a planned expansion,JamesCo Electronics borrowed $400,000 from King Finance.The______ loan agreement requires that JamesCo Electronics provide the title to their factory as collateral.

Accepted Answer

A) minority 
B) secured 
C) recapitalization 
D) pledged 
A) minority 
B) secured 
C) recapitalization 
D) pledged

Question 7

Financial managers often recommend that firms pay their bills as late as possible and try to collect what they are owed as soon as possible.

Accepted Answer

A) True 
 B)False

Question 8

After enjoying the increased sales and profits of several popular products,XYZ Inc.plans to expand their production facilities.The firm,a well-known producer of lawn care products,prefers financing this project with a funding source that avoids interest and dividend payments as well as underwriting costs.Which of the following best meets the needs of XYZ Inc.?

Accepted Answer

A) Retained earnings 
B) Common stock 
C) Venture capital 
D) Debenture bonds 
A) Retained earnings 
B) Common stock 
C) Venture capital 
D) Debenture bonds

Question 9

A capital budget combines all of the other budgets into one detailed plan used to monitor the operations of the firm.

Accepted Answer

A) True 
 B)False

Question 10

Why are preferred shares often referred to as a hybrid investment?

Accepted Answer

Because they have ch

Question 11

Equity financing represents funds provided by the owners of a firm.

Accepted Answer

A) True 
 B)False

Question 12

What is the overall objective of financial planning?

Accepted Answer

The overall objective of finan

Question 13

As a result of cash flow shortages,Kellco Department Stores has fallen behind in payments to suppliers.Some suppliers are withholding shipments to Kelco until they receive payments on overdue accounts.To meet their immediate needs,Kellco Department Stores should utilize:

Accepted Answer

A) vulture capital. 
B) short-term financing. 
C) contingency capital. 
D) long-term financing. 
A) vulture capital. 
B) short-term financing. 
C) contingency capital. 
D) long-term financing.

Question 14

Factoring refers to the process of selling inventory to generate short-term funds.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

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

Question 16

Which of the following is the most commonly used source of short-term financing for businesses?

Accepted Answer

A) trade credit 
B) bank loans 
C) factoring 
D) family and friends 
A) trade credit 
B) bank loans 
C) factoring 
D) family and friends

Question 17

Long-term loans are often more expensive than short-term loans.

Accepted Answer

A) True 
 B)False

Question 18

In an effort to reduce the risk of lending money,banks require that some borrowers pledge certain types of assets as collateral.

Accepted Answer

A) True 
 B)False

Question 19

Which of these is a common source of long-term financing for a corporation?

Accepted Answer

A) Trade credit. 
B) Commercial paper. 
C) A revolving credit agreement. 
D) A bond issue. 
A) Trade credit. 
B) Commercial paper. 
C) A revolving credit agreement. 
D) A bond issue.

Question 20

Factoring refers to the process of selling off accounts receivable for cash.

Accepted Answer

A) True 
 B)False

Many small businesses rely on factoring as a source of short-term financing because:

Retained earnings represent a source of equity financing.

Only financially stable firms are able to sell commercial paper to raise short-term funds.

Which of the following is the most popular way of raising cash among small businesses?

A firm's short-term financial forecast provides an estimate of sales.

To secure financing for a planned expansion,JamesCo Electronics borrowed $400,000 from King Finance.The______ loan agreement requires that JamesCo Electronics provide the title to their factory as collateral.

Financial managers often recommend that firms pay their bills as late as possible and try to collect what they are owed as soon as possible.

A capital budget combines all of the other budgets into one detailed plan used to monitor the operations of the firm.

Why are preferred shares often referred to as a hybrid investment?

Equity financing represents funds provided by the owners of a firm.

What is the overall objective of financial planning?

As a result of cash flow shortages,Kellco Department Stores has fallen behind in payments to suppliers.Some suppliers are withholding shipments to Kelco until they receive payments on overdue accounts.To meet their immediate needs,Kellco Department Stores should utilize:

Factoring refers to the process of selling inventory to generate short-term funds.

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

Which of the following is the most commonly used source of short-term financing for businesses?

Long-term loans are often more expensive than short-term loans.

In an effort to reduce the risk of lending money,banks require that some borrowers pledge certain types of assets as collateral.

Which of these is a common source of long-term financing for a corporation?

Factoring refers to the process of selling off accounts receivable for cash.

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

Many small businesses rely on factoring as a source of short-term financing because:

Retained earnings represent a source of equity financing.

Only financially stable firms are able to sell commercial paper to raise short-term funds.

Which of the following is the most popular way of raising cash among small businesses?

A firm's short-term financial forecast provides an estimate of sales.

To secure financing for a planned expansion,JamesCo Electronics borrowed $400,000 from King Finance.The______ loan agreement requires that JamesCo Electronics provide the title to their factory as collateral.

Financial managers often recommend that firms pay their bills as late as possible and try to collect what they are owed as soon as possible.

A capital budget combines all of the other budgets into one detailed plan used to monitor the operations of the firm.

Why are preferred shares often referred to as a hybrid investment?

Equity financing represents funds provided by the owners of a firm.

What is the overall objective of financial planning?

As a result of cash flow shortages,Kellco Department Stores has fallen behind in payments to suppliers.Some suppliers are withholding shipments to Kelco until they receive payments on overdue accounts.To meet their immediate needs,Kellco Department Stores should utilize:

Factoring refers to the process of selling inventory to generate short-term funds.

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

Which of the following is the most commonly used source of short-term financing for businesses?

Long-term loans are often more expensive than short-term loans.

In an effort to reduce the risk of lending money,banks require that some borrowers pledge certain types of assets as collateral.

Which of these is a common source of long-term financing for a corporation?

Factoring refers to the process of selling off accounts receivable for cash.

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