Question 1

Which of the following statements best describes preferred shares?

Accepted Answer

A)  Preferred shareholders are paid before other debt holders in the event of company dissolution. 
B)  The dividends for preferred shares are a variable amount. 
C)  Preferred shares are less costly than debt financing. 
D)  Preferred shareholders have to be paid annually. 
A)  Preferred shareholders are paid before other debt holders in the event of company dissolution. 
B)  The dividends for preferred shares are a variable amount. 
C)  Preferred shares are less costly than debt financing. 
D)  Preferred shareholders have to be paid annually.

Question 2

A short-term forecast is also called an operating plan.

Accepted Answer

A) True 
 B)False

Question 3

Funds invested in long-lived assets,such as land,buildings,machinery,and equipment,are called which of the following?

Accepted Answer

A)  operating expenses 
B)  production costs 
C)  manufacturing expenses 
D)  capital expenditures 
A)  operating expenses 
B)  production costs 
C)  manufacturing expenses 
D)  capital expenditures

Question 4

The concept of risk-return trade-off is best described by which of the following?

Accepted Answer

A)  It is important only at the lowest management levels. 
B)  It relates to higher risk requiring greater return. 
C)  It will be more likely to influence the financial activities in an international company than a national one. 
D)  It will be more likely to influence the financial activities in a service provider than a manufacturer. 
A)  It is important only at the lowest management levels. 
B)  It relates to higher risk requiring greater return. 
C)  It will be more likely to influence the financial activities in an international company than a national one. 
D)  It will be more likely to influence the financial activities in a service provider than a manufacturer.

Question 5

List three common reasons that companies make capital expenditures.

Accepted Answer

to expand,to replace

Question 6

Long-term debt would be used to finance which of the following activities?

Accepted Answer

A)  to replace broken glass in a window 
B)  to buy new tablecloths for a restaurant 
C)  to provide customer with a cash discount 
D)  to pay for a few pieces of equipment 
A)  to replace broken glass in a window 
B)  to buy new tablecloths for a restaurant 
C)  to provide customer with a cash discount 
D)  to pay for a few pieces of equipment

Question 7

What is risk management?

Accepted Answer

the process of identifying and

Question 8

The funds that are kept by the company out of profits and after dividends are paid are called which of the following?

Accepted Answer

A)  share equity 
B)  investor earnings 
C)  retained earnings 
D)  secondary earnings 
A)  share equity 
B)  investor earnings 
C)  retained earnings 
D)  secondary earnings

Question 9

The three most popular types of marketable securities are Treasury bills,certificates of deposit,and which of the following?

Accepted Answer

A)  money market funds 
B)  corporate bonds 
C)  Treasury notes 
D)  commercial paper 
A)  money market funds 
B)  corporate bonds 
C)  Treasury notes 
D)  commercial paper

Question 10

The financial planning process begins with which of the following?

Accepted Answer

A)  budgeting 
B)  expert systems 
C)  financial forecasts 
D)  brainstorming 
A)  budgeting 
B)  expert systems 
C)  financial forecasts 
D)  brainstorming

Question 11

Trade credit is credit extended to the buyer by the seller.It is entered in the buyer's books as an account receivable.

Accepted Answer

A) True 
 B)False

Question 12

Lines of credit are short-term loans that are secured by collateral.

Accepted Answer

A) True 
 B)False

Question 13

Linda's Kitchen is a bakery.Flour,sugar,eggs,milk,and chocolate would be included in which type of expenses?

Accepted Answer

A)  operating expenses 
B)  general expenses 
C)  managerial expenses 
D)  administrative expenses 
A)  operating expenses 
B)  general expenses 
C)  managerial expenses 
D)  administrative expenses

Question 14

Which of the following is a type of loan often used to finance buildup of inventory for seasonal (cyclical)businesses just before their strongest sales period?

Accepted Answer

A)  a collateral loan 
B)  an unsecured bank loan 
C)  trade credit 
D)  a secured bank loan 
A)  a collateral loan 
B)  an unsecured bank loan 
C)  trade credit 
D)  a secured bank loan

Question 15

Financial management is best described by which of the following?

Accepted Answer

A)  It is typically performed by a company's CEO. 
B)  It uses financial statements prepared by accountants to make financial decisions. 
C)  Its purpose is to collect and present financial data. 
D)  It is completely different from accounting. 
A)  It is typically performed by a company's CEO. 
B)  It uses financial statements prepared by accountants to make financial decisions. 
C)  Its purpose is to collect and present financial data. 
D)  It is completely different from accounting.

Question 16

Which of the following is the process of selecting the capital expenditures that offer the best returns and meet the goal of maximizing the company's value?

Accepted Answer

A)  capital evaluation 
B)  capital allocation 
C)  budget analysis 
D)  capital budgeting 
A)  capital evaluation 
B)  capital allocation 
C)  budget analysis 
D)  capital budgeting

Question 17

What are the four major ways of dealing with risk?

Accepted Answer

A)  control, retention, transfer, and avoidance 
B)  avoidance, retention, control, and retirement 
C)  control, retention, retirement, and avoidance 
D)  avoidance, retention, retrenchment, and control 
A)  control, retention, transfer, and avoidance 
B)  avoidance, retention, control, and retirement 
C)  control, retention, retirement, and avoidance 
D)  avoidance, retention, retrenchment, and control

Question 18

In finance,the opportunity for a profit is called return.

Accepted Answer

A) True 
 B)False

Question 19

The major disadvantage of debt financing is the inability to deduct interest expenses for income tax purposes.

Accepted Answer

A) True 
 B)False

Question 20

Financial managers are best described by which of the following?

Accepted Answer

A)  They focus on profit maximization. 
B)  They track how money is flowing into and out of the company. 
C)  They play such an important organizational role that they often are called operations managers. 
D)  They are not typically involved in long-term strategic planning. 
A)  They focus on profit maximization. 
B)  They track how money is flowing into and out of the company. 
C)  They play such an important organizational role that they often are called operations managers. 
D)  They are not typically involved in long-term strategic planning.

Which of the following statements best describes preferred shares?

A short-term forecast is also called an operating plan.

Funds invested in long-lived assets,such as land,buildings,machinery,and equipment,are called which of the following?

The concept of risk-return trade-off is best described by which of the following?

List three common reasons that companies make capital expenditures.

Long-term debt would be used to finance which of the following activities?

What is risk management?

The funds that are kept by the company out of profits and after dividends are paid are called which of the following?

The three most popular types of marketable securities are Treasury bills,certificates of deposit,and which of the following?

The financial planning process begins with which of the following?

Trade credit is credit extended to the buyer by the seller.It is entered in the buyer's books as an account receivable.

Lines of credit are short-term loans that are secured by collateral.

Linda's Kitchen is a bakery.Flour,sugar,eggs,milk,and chocolate would be included in which type of expenses?

Which of the following is a type of loan often used to finance buildup of inventory for seasonal (cyclical)businesses just before their strongest sales period?

Financial management is best described by which of the following?

Which of the following is the process of selecting the capital expenditures that offer the best returns and meet the goal of maximizing the company's value?

What are the four major ways of dealing with risk?

In finance,the opportunity for a profit is called return.

The major disadvantage of debt financing is the inability to deduct interest expenses for income tax purposes.

Financial managers are best described by which of the following?

Politics Governments’ Roles

Economics Evolving Systems

Social Society, Corporate Responsibility, and Making Ethical Decisions

Technology Managing Information for Business Success

International The Global Marketplace

Entrepreneurship and Small Business

Analyzing the Business

Forms of Business Ownership

Management and Leadership in Today’s Organizations

Designing Organizational Structures

Motivating Employees

Managing Human Resources and Labour Relations

Marketing The Customer Focus

Creating Marketing Strategies

Achieving World-Class Operations Management

Accounting for Financial Success

Understanding Money and the Canadian Financial System

Filters

Exam 18: Finance Maximizing the Value

Which of the following statements best describes preferred shares?

A short-term forecast is also called an operating plan.

Funds invested in long-lived assets,such as land,buildings,machinery,and equipment,are called which of the following?

The concept of risk-return trade-off is best described by which of the following?

List three common reasons that companies make capital expenditures.

Long-term debt would be used to finance which of the following activities?

What is risk management?

The funds that are kept by the company out of profits and after dividends are paid are called which of the following?

The three most popular types of marketable securities are Treasury bills,certificates of deposit,and which of the following?

The financial planning process begins with which of the following?

Trade credit is credit extended to the buyer by the seller.It is entered in the buyer's books as an account receivable.

Lines of credit are short-term loans that are secured by collateral.

Linda's Kitchen is a bakery.Flour,sugar,eggs,milk,and chocolate would be included in which type of expenses?

Which of the following is a type of loan often used to finance buildup of inventory for seasonal (cyclical)businesses just before their strongest sales period?

Financial management is best described by which of the following?

Which of the following is the process of selecting the capital expenditures that offer the best returns and meet the goal of maximizing the company's value?

What are the four major ways of dealing with risk?

In finance,the opportunity for a profit is called return.

The major disadvantage of debt financing is the inability to deduct interest expenses for income tax purposes.

Financial managers are best described by which of the following?

Politics Governments’ Roles

Economics Evolving Systems

Social Society, Corporate Responsibility, and Making Ethical Decisions

Technology Managing Information for Business Success

International The Global Marketplace

Entrepreneurship and Small Business

Analyzing the Business

Forms of Business Ownership

Management and Leadership in Today’s Organizations

Designing Organizational Structures

Motivating Employees

Managing Human Resources and Labour Relations

Marketing The Customer Focus

Creating Marketing Strategies

Achieving World-Class Operations Management

Accounting for Financial Success

Understanding Money and the Canadian Financial System

Filters