Exam 9: Finance: Acquiring Using Funds to Maximize Value

Certificate of deposit is an interest-earning deposit that requires the funds to remain deposited for a fixed term.

If an invoice lists the terms of trade credit as 2/10 net 30, it means that the supplier is offering a 10 percent cash discount off the invoice price if the buyer pays within 2 days.

Maurio Pena, a petroleum company, needs to pay $2 million to Zaiten Inc. Maurio Pena sells its old assets to another company and obtains enough money to pay its debt. In this scenario, Maurio Pena's ability to sell its old assets to another company in order to pay its debt to Zaiten is measured by analyzing _____.

The _____ measures how many times a firm's stock is sold and replaced each year.

An advantage of cash equivalents is that:

Which of the following statements is true of the Dodd-Frank Act?

In the context of accounting for the time value of money, discount rate remains constant in a specified number of time periods.

Newot Texin, a pharmaceutical company, introduces a new pain relieving drug in the market. It borrows $1 million from Esterotia, a private bank, to market the drug. In return, Esterotia allows Newot Texin to return the full amount with interest in fixed amounts of $200,000 every six months. Which of the following sources of long-term funds is being used by Newot Texin in the given scenario?

An advantage of factoring is that:

A project with a negative net present value should be:

Munit Exon, an automobile company, sells 100 cars in a year. The net income earned by the company is relatively more than the amount invested by it, thereby giving larger returns to its shareholders. To reach this conclusion, Munit Exon most likely analyzed its _____.

Trestone, a guitar manufacturing company, produces a thousand units of electric guitars each year. The company has been able to sell all its guitars by the end of the fiscal year and earn twice the amount spent on production and marketing. The given scenario indicates that Trestone most likely analyzes _____ for its financial planning.

Gotwing Inc., a multinational company, issues promissory notes to big corporations. As the company has strong credit ratings, it easily finds buyers without having to offer a substantial discount for its debt. Which of the following short-term financing options is being used by Gotwing Inc. in the given scenario?

Dominic and Matherson, a finance management company, lends money to Ebok, a fast food chain, in order to help Ebok market its new product. Dominic and Matherson provides financial support in the form of bonds. Which of the following financing options is being used by Ebok in the given scenario?

Financial managers evaluate a firm's current strengths and weaknesses by computing ratios that compare values of key accounts listed on their firm's:

Ponlinaytion, a clothing company, imports its raw materials from different countries. To cover the cost of expensive raw materials, Ponlinaytion takes a yearly loan of $5 million from Heritage Rimier, a finance company. The remaining budget is covered by the company itself. The given scenario indicates that the firm most likely relies on measuring _____ to decide how it finances its overall operations and growth by using different sources of funds.

Which of the following is a popular cash equivalent?

The _____ of a firm uses information from the sales budget and various cost budgets to develop a forecast of net earnings for the planning period.

Merith Qin, a textile company, relies on self-funding in order to sustain the promotion of its new product in the market. The company sold its newly issued stock and was able to amass a sizable amount of money to invest. Which of the following sources of long-term funds is being used by Merith Qin in the given scenario?

_____ measures how long it takes for a firm to receive payment from customers who buy on credit.