Question 1

Which of the following types of funding is likely to help a large corporation acquire a small or medium enterprise?

Accepted Answer

A) Factoring 
B) Trade credit 
C) Commercial paper 
D) Venture capital 
A) Factoring 
B) Trade credit 
C) Commercial paper 
D) Venture capital D

Question 2

Debt is frequently the least costly method of raising additional financing dollars,one of the reasons it is so frequently used.

Accepted Answer

A) True 
 B)False  True

Question 3

Randy works in the financial division of his company and is responsible for preparing monetary forecasts and analyzing major investment decisions.What is Randy's title?

Accepted Answer

A) Treasurer 
B) Chief financial officer 
C) Vice president for financial management 
D) Controller 
A) Treasurer 
B) Chief financial officer 
C) Vice president for financial management 
D) Controller C

Question 4

The chief executive officer (CEO)of a retailer of clothes plans to expand business into the accessories market.For this expansion,the CEO asks the chief financial officer (CFO)of the company to calculate the amount of funds the company will have to borrow from the bank.Which of the following types of funding is the CEO planning to obtain?

Accepted Answer

A) Factoring 
B) Trade credit 
C) Equity capital 
D) Debt capital 
A) Factoring 
B) Trade credit 
C) Equity capital 
D) Debt capital

Question 5

Explain how the cash inflows and outflows of a business are similar to those of a household.

Accepted Answer

The members of a household depend on wee

Question 6

In the context of the role of the financial manager,who among the following reports directly to the chief financial officer?

Accepted Answer

A) The CEO 
B) The COO 
C) The treasurer 
D) The investor 
A) The CEO 
B) The COO 
C) The treasurer 
D) The investor

Question 7

Financial managers are responsible for increasing profits to shareholders.

Accepted Answer

A) True 
 B)False

Question 8

Interest rates on short-term funds move up and down frequently.

Accepted Answer

A) True 
 B)False

Question 9

Explain the concept of leverage.

Accepted Answer

Leverage is created by increasing the ra

Question 10

Trade credit is a major source of short-term financing.

Accepted Answer

A) True 
 B)False

Question 11

A company's financial plan should answer all of the following questions EXCEPT _____.

Accepted Answer

A) What is the contingency plan in case of bankruptcy? 
B) What funds will the company require during the appropriate period of operations? 
C) How will it obtain the necessary money? 
D) When will it need more cash? 
A) What is the contingency plan in case of bankruptcy? 
B) What funds will the company require during the appropriate period of operations? 
C) How will it obtain the necessary money? 
D) When will it need more cash?

Question 12

In most firms,the controller is the chief accounting manager.

Accepted Answer

A) True 
 B)False

Question 13

In a quarterly meeting,Rand,a financial manager at InVest Inc. ,states that the company will benefit in the long term by utilizing a mix of debentures than focusing only on issuing shares.He states that this strategy will give his company a positive _____,which will increase the rate of return of the firm.

Accepted Answer

A) risk-return trade-off 
B) leverage 
C) hedge fund advantage 
D) divestiture 
A) risk-return trade-off 
B) leverage 
C) hedge fund advantage 
D) divestiture

Question 14

Kevin's company needs to obtain funds in order to keep the business going;however,he does not want stockholders influencing the direction of his company.What type of financing should Kevin acquire?

Accepted Answer

A) Angel investment 
B) Venture capital 
C) Debt capital 
D) Equity capital 
A) Angel investment 
B) Venture capital 
C) Debt capital 
D) Equity capital

Question 15

Complete the following using the terms listed.
-When Disney purchased Marvel using a combination of cash and securities,Disney made a(n)_____.

Accepted Answer

A) Venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leveraged buyout
I)private equity funds
J)divestiture
K)Marketable securities
L)financial manager
M)tender offer
N)Trade credit
O)leverage
P)capital structure
Q)Asset intensity
R)bonds
S)spin-off
T)Hedge funds
U)Inventory control
V)dividends
W)debt-to-equity (D/
E) 
X)compensating balances
Y)shareholder's equity 
A) Venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leveraged buyout
I)private equity funds
J)divestiture
K)Marketable securities
L)financial manager
M)tender offer
N)Trade credit
O)leverage
P)capital structure
Q)Asset intensity
R)bonds
S)spin-off
T)Hedge funds
U)Inventory control
V)dividends
W)debt-to-equity (D/
E) 
X)compensating balances
Y)shareholder's equity

Question 16

Commercial paper is an attractive short-term financing option because of its _____.

Accepted Answer

A) discount size 
B) maturity period 
C) interest rates 
D) availability 
A) discount size 
B) maturity period 
C) interest rates 
D) availability

Question 17

Complete the following using the terms listed.
-A transaction in which public shareholders are bought out and the company reverts to private status is known as a(n)_____.

Accepted Answer

A) Venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leveraged buyout
I)private equity funds
J)divestiture
K)Marketable securities
L)financial manager
M)tender offer
N)Trade credit
O)leverage
P)capital structure
Q)Asset intensity
R)bonds
S)spin-off
T)Hedge funds
U)Inventory control
V)dividends
W)debt-to-equity (D/
E) 
X)compensating balances
Y)shareholder's equity 
A) Venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leveraged buyout
I)private equity funds
J)divestiture
K)Marketable securities
L)financial manager
M)tender offer
N)Trade credit
O)leverage
P)capital structure
Q)Asset intensity
R)bonds
S)spin-off
T)Hedge funds
U)Inventory control
V)dividends
W)debt-to-equity (D/
E) 
X)compensating balances
Y)shareholder's equity

Question 18

Virtually,all financial decisions involve a trade-off between risk and return.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is the best definition of financial risk?

Accepted Answer

A) It is the uncertainty about the gain or loss from an investment. 
B) It is the uncertainty that an investment's actual return will be less than its expected return. 
C) It is the possibility that an investment will earn a negative return. 
D) It is the possibility that an investment will lose money. 
A) It is the uncertainty about the gain or loss from an investment. 
B) It is the uncertainty that an investment's actual return will be less than its expected return. 
C) It is the possibility that an investment will earn a negative return. 
D) It is the possibility that an investment will lose money.

Question 20

Identify a true statement about commercial paper.

Accepted Answer

A) Access to the commercial paper market is restricted to small and medium enterprises. 
B) Commercial paper has a maturity that ranges from 10 to 27 years. 
C) Most commercial paper is secured. 
D) Commercial paper is typically sold in multiples of $100,000 to $1 million. 
A) Access to the commercial paper market is restricted to small and medium enterprises. 
B) Commercial paper has a maturity that ranges from 10 to 27 years. 
C) Most commercial paper is secured. 
D) Commercial paper is typically sold in multiples of $100,000 to $1 million.

Which of the following types of funding is likely to help a large corporation acquire a small or medium enterprise?

Debt is frequently the least costly method of raising additional financing dollars,one of the reasons it is so frequently used.

Randy works in the financial division of his company and is responsible for preparing monetary forecasts and analyzing major investment decisions.What is Randy's title?

Explain how the cash inflows and outflows of a business are similar to those of a household.

In the context of the role of the financial manager,who among the following reports directly to the chief financial officer?

Financial managers are responsible for increasing profits to shareholders.

Interest rates on short-term funds move up and down frequently.

Explain the concept of leverage.

Trade credit is a major source of short-term financing.

A company's financial plan should answer all of the following questions EXCEPT _____.

In most firms,the controller is the chief accounting manager.

Kevin's company needs to obtain funds in order to keep the business going;however,he does not want stockholders influencing the direction of his company.What type of financing should Kevin acquire?

Complete the following using the terms listed. -When Disney purchased Marvel using a combination of cash and securities,Disney made a(n)_____.

Commercial paper is an attractive short-term financing option because of its _____.

Complete the following using the terms listed. -A transaction in which public shareholders are bought out and the company reverts to private status is known as a(n)_____.

Virtually,all financial decisions involve a trade-off between risk and return.

Which of the following is the best definition of financial risk?

Identify a true statement about commercial paper.

The Changing Face of Business

Business Ethics and Social Responsibility

Economic Challenges Facing Todays Business

Competing in World Markets

Forms of Business Ownership and Organization

Starting Your Own Business: the Entrepreneurship Alternative

Management,leadership,and the Internal Organization

Human Resource Management: From Recruitment to Labor Relations

Top Performance Through Empowerment, teamwork, and Communication

Production and Operations Management

Customer-Driven Marketing

Product and Distribution Strategies

Promotion and Pricing Strategies

Using Technology to Manage Information

Understanding Accounting and Financial Statements

The Financial System

Trends in E-Commerce

Filters

Exam 17: Financial Management

Which of the following types of funding is likely to help a large corporation acquire a small or medium enterprise?

Debt is frequently the least costly method of raising additional financing dollars,one of the reasons it is so frequently used.

Randy works in the financial division of his company and is responsible for preparing monetary forecasts and analyzing major investment decisions.What is Randy's title?

Explain how the cash inflows and outflows of a business are similar to those of a household.

In the context of the role of the financial manager,who among the following reports directly to the chief financial officer?

Financial managers are responsible for increasing profits to shareholders.

Interest rates on short-term funds move up and down frequently.

Explain the concept of leverage.

Trade credit is a major source of short-term financing.

A company's financial plan should answer all of the following questions EXCEPT _____.

In most firms,the controller is the chief accounting manager.

Kevin's company needs to obtain funds in order to keep the business going;however,he does not want stockholders influencing the direction of his company.What type of financing should Kevin acquire?

Complete the following using the terms listed. -When Disney purchased Marvel using a combination of cash and securities,Disney made a(n)_____.

Commercial paper is an attractive short-term financing option because of its _____.

Complete the following using the terms listed. -A transaction in which public shareholders are bought out and the company reverts to private status is known as a(n)_____.

Virtually,all financial decisions involve a trade-off between risk and return.

Which of the following is the best definition of financial risk?

Identify a true statement about commercial paper.

The Changing Face of Business

Business Ethics and Social Responsibility

Economic Challenges Facing Todays Business

Competing in World Markets

Forms of Business Ownership and Organization

Starting Your Own Business: the Entrepreneurship Alternative

Management,leadership,and the Internal Organization

Human Resource Management: From Recruitment to Labor Relations

Top Performance Through Empowerment, teamwork, and Communication

Production and Operations Management

Customer-Driven Marketing

Product and Distribution Strategies

Promotion and Pricing Strategies

Using Technology to Manage Information

Understanding Accounting and Financial Statements

The Financial System

Trends in E-Commerce

Filters