Question 1

For a risk to be insurable, it must be under the control of the insured.

Accepted Answer

A) True 
 B)False  False

Question 2

What is the term for making sure that enough cash is on hand to pay bills as they come due and to meet unexpected expenses?

Accepted Answer

A)  cash targeting 
B)  cash management 
C)  cash maintenance 
D)  cash capitalization 
A)  cash targeting 
B)  cash management 
C)  cash maintenance 
D)  cash capitalization B

Question 3

What are private individual investors who sometimes provide venture capital to small companies in need of equity capital?

Accepted Answer

A)  angel investors 
B)  entrepreneur backers 
C)  opportunists 
D)  benefactors 
A)  angel investors 
B)  entrepreneur backers 
C)  opportunists 
D)  benefactors A

Question 4

Earth Worm is an independent bookstore that went bankrupt due to an unexpected demand for cash to fix a leaking roof. Which of the following activities might have allowed the business to continue operation?

Accepted Answer

A)  better cash maintenance 
B)  better cash targeting 
C)  better cash management 
D)  better cash capitalization 
A)  better cash maintenance 
B)  better cash targeting 
C)  better cash management 
D)  better cash capitalization

Question 5

In seeking a balance between the opportunity for profit and the potential for loss, a financial manager is dealing with which of the following concepts?

Accepted Answer

A)  potential profit trade-off 
B)  sales-profit trade-off 
C)  risk-return trade-off 
D)  profit-loss trade-off 
A)  potential profit trade-off 
B)  sales-profit trade-off 
C)  risk-return trade-off 
D)  profit-loss trade-off

Question 6

Which of the following is NOT one of the 6 C's of credit to determine the risk that the borrower will default on the debt?

Accepted Answer

A)  conditions 
B)  collateral 
C)  co-payers 
D)  confidence 
A)  conditions 
B)  collateral 
C)  co-payers 
D)  confidence

Question 7

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 8

What is the major advantage of debt financing?

Accepted Answer

A)  absence of factoring 
B)  number of different sources from which it is available 
C)  deductibility of interest expenses 
D)  lack of dependence on collateral 
A)  absence of factoring 
B)  number of different sources from which it is available 
C)  deductibility of interest expenses 
D)  lack of dependence on collateral

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

What is the term for the extension of credit by the seller to the buyer between the time the buyer receives the goods or services and when it pays for them?

Accepted Answer

A)  revolving credit 
B)  supplier's credit 
C)  trade credit 
D)  line of credit 
A)  revolving credit 
B)  supplier's credit 
C)  trade credit 
D)  line of credit

Question 11

Why is the issuance and sale of preferred shares more expensive than debt financing?

Accepted Answer

Preferred dividends are not tax-deductib

Question 12

Esselte is one of the world's leading producers of office supplies. The company forecasts that its profits will double by the year 2020, and its financial manager will need to determine what should be done with the increased earnings. This forecast is part of which of the following activities?

Accepted Answer

A)  the company's marketing plan 
B)  the company's strategic plan 
C)  the company's operating plan 
D)  the company's production budget 
A)  the company's marketing plan 
B)  the company's strategic plan 
C)  the company's operating plan 
D)  the company's production budget

Question 13

Which of the following statements best describes preferred shares?

Accepted Answer

A)  Preferred shares carry voting rights. 
B)  Preferred shares produce a fixed-amount dividend. 
C)  Preferred shareholders receive dividends after common shareholders. 
D)  Preferred shares can be owned only by upper management. 
A)  Preferred shares carry voting rights. 
B)  Preferred shares produce a fixed-amount dividend. 
C)  Preferred shareholders receive dividends after common shareholders. 
D)  Preferred shares can be owned only by upper management.

Question 14

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

Accepted Answer

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

Question 15

What is a financial manager doing when he or she sets credit terms and decides on collection policies?

Accepted Answer

managing a

Question 16

The financial crisis of 2008 has had little effect on money management.

Accepted Answer

A) True 
 B)False

Question 17

Today, an organization's chief financial officer is expected to take the central role in establishing public trust.

Accepted Answer

A) True 
 B)False

Question 18

Long-term assets that are easily converted into cash are called marketable securities.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following are specific repayment conditions as to how long customers have to pay bills and the amount of cash discount allowed?

Accepted Answer

A)  revolving accounts 
B)  credit credentials 
C)  credit terms 
D)  liability procedures 
A)  revolving accounts 
B)  credit credentials 
C)  credit terms 
D)  liability procedures

Question 20

What are the funds that are kept by the company out of profits and after dividends are paid?

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

For a risk to be insurable, it must be under the control of the insured.

What is the term for making sure that enough cash is on hand to pay bills as they come due and to meet unexpected expenses?

What are private individual investors who sometimes provide venture capital to small companies in need of equity capital?

Earth Worm is an independent bookstore that went bankrupt due to an unexpected demand for cash to fix a leaking roof. Which of the following activities might have allowed the business to continue operation?

In seeking a balance between the opportunity for profit and the potential for loss, a financial manager is dealing with which of the following concepts?

Which of the following is NOT one of the 6 C's of credit to determine the risk that the borrower will default on the debt?

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

What is the major advantage of debt financing?

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

What is the term for the extension of credit by the seller to the buyer between the time the buyer receives the goods or services and when it pays for them?

Why is the issuance and sale of preferred shares more expensive than debt financing?

Esselte is one of the world's leading producers of office supplies. The company forecasts that its profits will double by the year 2020, and its financial manager will need to determine what should be done with the increased earnings. This forecast is part of which of the following activities?

Which of the following statements best describes preferred shares?

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

What is a financial manager doing when he or she sets credit terms and decides on collection policies?

The financial crisis of 2008 has had little effect on money management.

Today, an organization's chief financial officer is expected to take the central role in establishing public trust.

Long-term assets that are easily converted into cash are called marketable securities.

Which of the following are specific repayment conditions as to how long customers have to pay bills and the amount of cash discount allowed?

What are the funds that are kept by the company out of profits and after dividends are paid?

Political Environment

Economic Environment

Social Environment

Technological Environment

International Environment

Entrepreneurship and Small Business

Understanding 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

Creating Marketing Strategies

Achieving World-class Operations Management

Accounting for Financial Success

Understanding Money and the Canadian Financial System

Filters

Exam 18: Finance

For a risk to be insurable, it must be under the control of the insured.

What is the term for making sure that enough cash is on hand to pay bills as they come due and to meet unexpected expenses?

What are private individual investors who sometimes provide venture capital to small companies in need of equity capital?

Earth Worm is an independent bookstore that went bankrupt due to an unexpected demand for cash to fix a leaking roof. Which of the following activities might have allowed the business to continue operation?

In seeking a balance between the opportunity for profit and the potential for loss, a financial manager is dealing with which of the following concepts?

Which of the following is NOT one of the 6 C's of credit to determine the risk that the borrower will default on the debt?

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

What is the major advantage of debt financing?

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

What is the term for the extension of credit by the seller to the buyer between the time the buyer receives the goods or services and when it pays for them?

Why is the issuance and sale of preferred shares more expensive than debt financing?

Esselte is one of the world's leading producers of office supplies. The company forecasts that its profits will double by the year 2020, and its financial manager will need to determine what should be done with the increased earnings. This forecast is part of which of the following activities?

Which of the following statements best describes preferred shares?

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

What is a financial manager doing when he or she sets credit terms and decides on collection policies?

The financial crisis of 2008 has had little effect on money management.

Today, an organization's chief financial officer is expected to take the central role in establishing public trust.

Long-term assets that are easily converted into cash are called marketable securities.

Which of the following are specific repayment conditions as to how long customers have to pay bills and the amount of cash discount allowed?

What are the funds that are kept by the company out of profits and after dividends are paid?

Political Environment

Economic Environment

Social Environment

Technological Environment

International Environment

Entrepreneurship and Small Business

Understanding 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

Creating Marketing Strategies

Achieving World-class Operations Management

Accounting for Financial Success

Understanding Money and the Canadian Financial System

Filters