Question 1

The time value of money is the principle that a dollar received today is worth less than a dollar received in the future.

Accepted Answer

A) True 
 B)False

Question 2

Jasmine started a small business two years ago. The business is just now seeing some success, and Jasmine notes that she has a few thousand dollars more in her bank account than she currently needs to pay her bills. However, because of the uncertainty of cash flows in her new business, she is concerned that she may need access to these funds on fairly short notice in the future. Given this situation, what should Jasmine do?

Accepted Answer

A)  She should put some of her excess cash into money market mutual funds. 
B)  She should use her excess cash to buy intangible assets. 
C)  She should invest the funds in common stocks. 
D)  She should keep all of these funds in her chequing account. 
A)  She should put some of her excess cash into money market mutual funds. 
B)  She should use her excess cash to buy intangible assets. 
C)  She should invest the funds in common stocks. 
D)  She should keep all of these funds in her chequing account.

Question 3

A commitment to meeting social responsibilities can contribute to a more profitable company and an increase in shareholder value.

Accepted Answer

A) True 
 B)False

Question 4

Today many financial managers accept the view that serving the needs of other stakeholders can be consistent with the goal of maximizing the value of the firm to its owners.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is a source of long-term funds?

Accepted Answer

A)  spontaneous financing 
B)  factoring 
C)  direct investment from owners 
D)  asset-backed commercial paper 
A)  spontaneous financing 
B)  factoring 
C)  direct investment from owners 
D)  asset-backed commercial paper

Question 6

Discuss how financial managers use cash budgets.

Accepted Answer

Financial managers use the cash budget t

Question 7

Allowing customers to buy on credit can significantly increase sales; however, credit sales can create cash flow problems.

Accepted Answer

A) True 
 B)False

Question 8

Covenants are terms included in long-term loan agreements that are intended to protect borrowers from unfair policies imposed by lenders.

Accepted Answer

A) True 
 B)False

Question 9

What are two major projected financial statements developed during financial planning?

Accepted Answer

A)  forecast balance sheet and forecast statement of cash flows 
B)  prototype retained earnings statement and prototype balance sheet 
C)  pro forma balance sheet and pro forma income statement 
D)  predicted statement of cash flows and predicted income statement 
A)  forecast balance sheet and forecast statement of cash flows 
B)  prototype retained earnings statement and prototype balance sheet 
C)  pro forma balance sheet and pro forma income statement 
D)  predicted statement of cash flows and predicted income statement

Question 10

Which process does a firm use to evaluate long-term investment proposals?

Accepted Answer

A)  capital accounting 
B)  capital forecasting 
C)  capital mapping 
D)  capital budgeting 
A)  capital accounting 
B)  capital forecasting 
C)  capital mapping 
D)  capital budgeting

Question 11

Which of the following proposals would be considered under capital budgeting?

Accepted Answer

A)  introduction of a new product to an existing product line 
B)  introduction of an entirely new product line 
C)  introduction of a new ad campaign 
D)  introduction of a new size of an existing product 
A)  introduction of a new product to an existing product line 
B)  introduction of an entirely new product line 
C)  introduction of a new ad campaign 
D)  introduction of a new size of an existing product

Question 12

Financial managers at Tuckerverse Corporation have just computed the NPV for a capital budgeting proposal and found that it is $1500. The financial managers are likely to approve this proposal.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is one of the most important sources of short-term financing for many firms?

Accepted Answer

A)  donations 
B)  direct investment from owners 
C)  corporate bonds 
D)  trade credit 
A)  donations 
B)  direct investment from owners 
C)  corporate bonds 
D)  trade credit

Question 14

Another way firms can meet long-term needs is by reinvesting their earnings. The profits that a firm reinvests are called retained earnings.

Accepted Answer

A) True 
 B)False

Question 15

Danielle, the regional manager of CDz music store, is trying to determine if the store should invest in a new computerized inventory tracking system. Using financial analysis, she would decide that the investment was desirable in which of the following situations?

Accepted Answer

A)  if total positive cash flows were greater than total negative cash flows 
B)  if its NPV were equal to or greater than zero 
C)  if the firm had enough cash to make the purchase without having to arrange additional financing 
D)  if its NPV were less than zero 
A)  if total positive cash flows were greater than total negative cash flows 
B)  if its NPV were equal to or greater than zero 
C)  if the firm had enough cash to make the purchase without having to arrange additional financing 
D)  if its NPV were less than zero

Question 16

A cash flow of $1000 received three years from today would have the same present value as a cash flow of $1000 received two years from today.

Accepted Answer

A) True 
 B)False

Question 17

In which scenario can firms achieve their objective by developing a relationship with a firm that offers factoring services?

Accepted Answer

A)  The firm has established a source of long-term financing that avoids fees and commissions. 
B)  The firm plans to issue large sums of commercial paper in the near future. 
C)  The firm has larger than necessary cash balances and wants to find a safe way to invest the excess cash. 
D)  The firm relies heavily on credit sales and wants to speed up the receipt of cash. 
A)  The firm has established a source of long-term financing that avoids fees and commissions. 
B)  The firm plans to issue large sums of commercial paper in the near future. 
C)  The firm has larger than necessary cash balances and wants to find a safe way to invest the excess cash. 
D)  The firm relies heavily on credit sales and wants to speed up the receipt of cash.

Question 18

How do today's financial managers generally feel about treating customers, employees, suppliers, creditors, and other stakeholders with fairness and respect?

Accepted Answer

A)  They feel it often helps the firm build value for its owners. 
B)  They feel it is a job best left to other departments within the organization. 
C)  They feel it may be important from an ethical perspective but has little to do with meeting the firm's financial objectives. 
D)  They feel it is a more important goal than increasing the value of the firm to its owners. 
A)  They feel it often helps the firm build value for its owners. 
B)  They feel it is a job best left to other departments within the organization. 
C)  They feel it may be important from an ethical perspective but has little to do with meeting the firm's financial objectives. 
D)  They feel it is a more important goal than increasing the value of the firm to its owners.

Question 19

What is spontaneous financing? What is the most common source of this type of financing? If you see 2/10 net 30 on a shipment invoice, what does it tell the buyer about the payment terms?

Accepted Answer

Spontaneous financing refers to short-te

Question 20

Money market mutual funds are an attractive cash equivalent for smaller firms.

Accepted Answer

A) True 
 B)False

The time value of money is the principle that a dollar received today is worth less than a dollar received in the future.

A commitment to meeting social responsibilities can contribute to a more profitable company and an increase in shareholder value.

Today many financial managers accept the view that serving the needs of other stakeholders can be consistent with the goal of maximizing the value of the firm to its owners.

Which of the following is a source of long-term funds?

Discuss how financial managers use cash budgets.

Allowing customers to buy on credit can significantly increase sales; however, credit sales can create cash flow problems.

Covenants are terms included in long-term loan agreements that are intended to protect borrowers from unfair policies imposed by lenders.

What are two major projected financial statements developed during financial planning?

Which process does a firm use to evaluate long-term investment proposals?

Which of the following proposals would be considered under capital budgeting?

Financial managers at Tuckerverse Corporation have just computed the NPV for a capital budgeting proposal and found that it is $1500. The financial managers are likely to approve this proposal.

Which of the following is one of the most important sources of short-term financing for many firms?

Another way firms can meet long-term needs is by reinvesting their earnings. The profits that a firm reinvests are called retained earnings.

Danielle, the regional manager of CDz music store, is trying to determine if the store should invest in a new computerized inventory tracking system. Using financial analysis, she would decide that the investment was desirable in which of the following situations?

A cash flow of $1000 received three years from today would have the same present value as a cash flow of $1000 received two years from today.

In which scenario can firms achieve their objective by developing a relationship with a firm that offers factoring services?

How do today's financial managers generally feel about treating customers, employees, suppliers, creditors, and other stakeholders with fairness and respect?

What is spontaneous financing? What is the most common source of this type of financing? If you see 2/10 net 30 on a shipment invoice, what does it tell the buyer about the payment terms?

Money market mutual funds are an attractive cash equivalent for smaller firms.

Business Now: Change Is the Only Constant

Business Ethics and Social Responsibility: Doing Well by Doing Good

Economics: The Framework for Business

The World Market-Place: Business Without Borders

Business Formation: Choosing the Form That Fits

Small Business and Entrepreneurship: Economic Rocket Fuel

Accounting: Decision Making by the Numbers

Financial Markets: Allocating Financial Resources

Marketing: Building Profitable Customer Connections

Product and Promotion: Creating and Communicating Value

Distribution and Pricing: Right Product, Right Person, Right Place, Right Price

Management, Motivation, and Leadership: Bringing Business to Life

Human Resource Management: Building a Top-Quality Workforce

Managing Information and Technology: Finding New Ways to Learn and Link

Operations Management: Putting It All Together

Business Communication: Creating and Delivering Messages That Matter

Labour Unions and Collective Bargaining

Business Law

Personal Finance

Filters

Exam 8: Finance: Acquiring and Using Funds to Maximize Value

The time value of money is the principle that a dollar received today is worth less than a dollar received in the future.

A commitment to meeting social responsibilities can contribute to a more profitable company and an increase in shareholder value.

Today many financial managers accept the view that serving the needs of other stakeholders can be consistent with the goal of maximizing the value of the firm to its owners.

Which of the following is a source of long-term funds?

Discuss how financial managers use cash budgets.

Allowing customers to buy on credit can significantly increase sales; however, credit sales can create cash flow problems.

Covenants are terms included in long-term loan agreements that are intended to protect borrowers from unfair policies imposed by lenders.

What are two major projected financial statements developed during financial planning?

Which process does a firm use to evaluate long-term investment proposals?

Which of the following proposals would be considered under capital budgeting?

Financial managers at Tuckerverse Corporation have just computed the NPV for a capital budgeting proposal and found that it is $1500. The financial managers are likely to approve this proposal.

Which of the following is one of the most important sources of short-term financing for many firms?

Another way firms can meet long-term needs is by reinvesting their earnings. The profits that a firm reinvests are called retained earnings.

Danielle, the regional manager of CDz music store, is trying to determine if the store should invest in a new computerized inventory tracking system. Using financial analysis, she would decide that the investment was desirable in which of the following situations?

A cash flow of $1000 received three years from today would have the same present value as a cash flow of $1000 received two years from today.

In which scenario can firms achieve their objective by developing a relationship with a firm that offers factoring services?

How do today's financial managers generally feel about treating customers, employees, suppliers, creditors, and other stakeholders with fairness and respect?

What is spontaneous financing? What is the most common source of this type of financing? If you see 2/10 net 30 on a shipment invoice, what does it tell the buyer about the payment terms?

Money market mutual funds are an attractive cash equivalent for smaller firms.

Business Now: Change Is the Only Constant

Business Ethics and Social Responsibility: Doing Well by Doing Good

Economics: The Framework for Business

The World Market-Place: Business Without Borders

Business Formation: Choosing the Form That Fits

Small Business and Entrepreneurship: Economic Rocket Fuel

Accounting: Decision Making by the Numbers

Financial Markets: Allocating Financial Resources

Marketing: Building Profitable Customer Connections

Product and Promotion: Creating and Communicating Value

Distribution and Pricing: Right Product, Right Person, Right Place, Right Price

Management, Motivation, and Leadership: Bringing Business to Life

Human Resource Management: Building a Top-Quality Workforce

Managing Information and Technology: Finding New Ways to Learn and Link

Operations Management: Putting It All Together

Business Communication: Creating and Delivering Messages That Matter

Labour Unions and Collective Bargaining

Business Law

Personal Finance

Filters