Question 1

Discretionary financing needs implies

Accepted Answer

A)  that management may choose between various forms of debt and equity. 
B)  that the purchases being financed are optional rather than necessary. 
C)  that management has considerable discretion in how to dispose of retained earnings. 
D)  that management may choose between debt, new equity or retained earnings. 
A)  that management may choose between various forms of debt and equity. 
B)  that the purchases being financed are optional rather than necessary. 
C)  that management has considerable discretion in how to dispose of retained earnings. 
D)  that management may choose between debt, new equity or retained earnings.

Question 2

Cash budgets usually include details such as the timing of materials purchases, interest payments, and the like.

Accepted Answer

A) True 
 B)False

Question 3

Based on the information in Table 3, what is Thompson's projected cash balance as of April 1, 2017?

Accepted Answer

A)  $32,000 
B)  $4,300 
C)  $25,000 
D)  None of the above 
A)  $32,000 
B)  $4,300 
C)  $25,000 
D)  None of the above

Question 4

What is meant by discretionary financing?

Accepted Answer

Discretionary financing could be any typ

Question 5

Broad Cloth, Inc.'s average collection period is 15 days. The vice-president of marketing has projected credit sales of $2. million for October, $2.5 million for November and $3 million for December. Compute cash collections for November and December. Assume that all months have 30 days.

Accepted Answer

November collections = last 50% of Octob

Question 6

Which of the following will decrease cumulative borrowing on the cash budget?

Accepted Answer

A)  A decrease in interest expense 
B)  A decrease in collections 
C)  An increase in equipment purchases 
D)  Both A and B 
A)  A decrease in interest expense 
B)  A decrease in collections 
C)  An increase in equipment purchases 
D)  Both A and B

Question 7

What are the key questions that a strategic plan attempts to answer? How does it relate to financial plans?

Accepted Answer

The strategic plan asks such fundamental

Question 8

The initiation of a major advertising campaign would be an example of an event that would affect past trends in sales when projecting statements.

Accepted Answer

A) True 
 B)False

Question 9

The percentages used in the percent-of-sales method comes from pro forma financial statements.

Accepted Answer

A) True 
 B)False

Question 10

A typical corporate planning process will encompass

Accepted Answer

A)  a short-term financial plan. 
B)  a long-term financial plan. 
C)  a strategic plan. 
D)  all of the above. 
A)  a short-term financial plan. 
B)  a long-term financial plan. 
C)  a strategic plan. 
D)  all of the above.

Question 11

Which of the following expenses should be included as a cash outlay in the preparation of a cash budget?

Accepted Answer

A)  The payment of accounts payable 
B)  The payment of depreciation expense 
C)  The payment of accrued income taxes 
D)  All of the above 
A)  The payment of accounts payable 
B)  The payment of depreciation expense 
C)  The payment of accrued income taxes 
D)  All of the above

Question 12

Long-term financial planning results in

Accepted Answer

A)  a cash budget. 
B)  pro forma financial statements. 
C)  a sales forecast for the next 1 to 3 years. 
D)  a general narrative detailing near-term scenarios. 
A)  a cash budget. 
B)  pro forma financial statements. 
C)  a sales forecast for the next 1 to 3 years. 
D)  a general narrative detailing near-term scenarios.

Question 13

Which of the following is a spontaneous source of financing?

Accepted Answer

A)  Accrued expenses 
B)  Notes payable 
C)  Common stock 
D)  Paid-in capital 
A)  Accrued expenses 
B)  Notes payable 
C)  Common stock 
D)  Paid-in capital

Question 14

Considering each action independently and holding other things constant, which of the following actions would increase a firm's discretionary financing needed (the need for additional capital)?

Accepted Answer

A)  A decrease in the firm's accounts receivable average collection period 
B)  An increase in the firm's profit margin 
C)  A decrease in the firm's inventory turnover 
D)  A decrease in the expected growth rate in sales 
A)  A decrease in the firm's accounts receivable average collection period 
B)  An increase in the firm's profit margin 
C)  A decrease in the firm's inventory turnover 
D)  A decrease in the expected growth rate in sales

Question 15

Which of the following is the correct method of determining discretionary financing needed (DFN)?

Accepted Answer

A)  Projected change in assets, divided by projected change in liabilities, plus projected change in owner's equity 
B)  Projected change in assets, times projected change in owner's equity, minus projected change in liabilities 
C)  Projected change in owner's equity, minus projected change in liabilities, plus projected change in assets 
D)  Projected change in assets, minus projected change in liabilities, minus projected change in owner's equity 
A)  Projected change in assets, divided by projected change in liabilities, plus projected change in owner's equity 
B)  Projected change in assets, times projected change in owner's equity, minus projected change in liabilities 
C)  Projected change in owner's equity, minus projected change in liabilities, plus projected change in assets 
D)  Projected change in assets, minus projected change in liabilities, minus projected change in owner's equity

Question 16

Banner's projected current assets for 2018 are

Accepted Answer

A)  $1,000,000. 
B)  $1,120,000. 
C)  $1,500,000. 
D)  $1,260,000. 
A)  $1,000,000. 
B)  $1,120,000. 
C)  $1,500,000. 
D)  $1,260,000.

Question 17

Banner's projected long-term debt for 2018 is

Accepted Answer

A)  $700,000. 
B)  $880,000. 
C)  $380,000. 
D)  $300,000. 
A)  $700,000. 
B)  $880,000. 
C)  $380,000. 
D)  $300,000.

Question 18

The "percentage" used in the percent-of-sales calculation can be obtained from

Accepted Answer

A)  the most recent financial statement item as a percent of current sales. 
B)  an average computed over several years. 
C)  an analyst's judgment. 
D)  all of the above. 
A)  the most recent financial statement item as a percent of current sales. 
B)  an average computed over several years. 
C)  an analyst's judgment. 
D)  all of the above.

Question 19

In 2016 Mango Corporation had net income of $5 million on sales of $50 million. The 2016 balance sheet showed current liabilities of $12 million, long-term debt of $18 million and equity of $45 million. The sales forecast for 2017 is $54 million. If Mango pays no dividends, what is the forecasted increase or decrease in equity at the end of 2017?

Accepted Answer

A)  $49.5 million 
B)  $ 4.5 million 
C)  $5.4 million 
D)  $(5.4) million 
A)  $49.5 million 
B)  $ 4.5 million 
C)  $5.4 million 
D)  $(5.4) million

Question 20

Strategic planning encompasses all of the following EXCEPT:

Accepted Answer

A)  a cash budget. 
B)  a description of the firm's core competencies and activities. 
C)  a definition of the firm's customers. 
D)  a description of the firm's competitors and its own competitive strengths and weaknesses. 
A)  a cash budget. 
B)  a description of the firm's core competencies and activities. 
C)  a definition of the firm's customers. 
D)  a description of the firm's competitors and its own competitive strengths and weaknesses.

Discretionary financing needs implies

Cash budgets usually include details such as the timing of materials purchases, interest payments, and the like.

Based on the information in Table 3, what is Thompson's projected cash balance as of April 1, 2017?

What is meant by discretionary financing?

Broad Cloth, Inc.'s average collection period is 15 days. The vice-president of marketing has projected credit sales of $2. million for October, $2.5 million for November and $3 million for December. Compute cash collections for November and December. Assume that all months have 30 days.

Which of the following will decrease cumulative borrowing on the cash budget?

What are the key questions that a strategic plan attempts to answer? How does it relate to financial plans?

The initiation of a major advertising campaign would be an example of an event that would affect past trends in sales when projecting statements.

The percentages used in the percent-of-sales method comes from pro forma financial statements.

A typical corporate planning process will encompass

Which of the following expenses should be included as a cash outlay in the preparation of a cash budget?

Long-term financial planning results in

Which of the following is a spontaneous source of financing?

Considering each action independently and holding other things constant, which of the following actions would increase a firm's discretionary financing needed (the need for additional capital)?

Which of the following is the correct method of determining discretionary financing needed (DFN)?

Banner's projected current assets for 2018 are

Banner's projected long-term debt for 2018 is

The "percentage" used in the percent-of-sales calculation can be obtained from

Strategic planning encompasses all of the following EXCEPT:

Getting Started-Principles of Finance

Firms and the Financial Market

Understanding Financial Statements, Taxes, and Cash Flows

Financial Analysis-Sizing up Firm Performance

Time Value of Money-The Basics

The Time Value of Money-Annuities and Other Topics

An Introduction to Risk and Return-History of Financial Market Returns

Risk and Return-Capital Market Theory

Debt Valuation and Interest Rates

Stock Valuation

Investment Decision Criteria

Analyzing Project Cash Flows

Risk Analysis and Project Evaluation

The Cost of Capital

Capital Structure Policy

Dividend Policy

Working Capital Management

International Business Finance

Corporate Risk Management

Filters

Exam 17: Financial Forecasting and Planning

Discretionary financing needs implies

Cash budgets usually include details such as the timing of materials purchases, interest payments, and the like.

Based on the information in Table 3, what is Thompson's projected cash balance as of April 1, 2017?

What is meant by discretionary financing?

Broad Cloth, Inc.'s average collection period is 15 days. The vice-president of marketing has projected credit sales of $2. million for October, $2.5 million for November and $3 million for December. Compute cash collections for November and December. Assume that all months have 30 days.

Which of the following will decrease cumulative borrowing on the cash budget?

What are the key questions that a strategic plan attempts to answer? How does it relate to financial plans?

The initiation of a major advertising campaign would be an example of an event that would affect past trends in sales when projecting statements.

The percentages used in the percent-of-sales method comes from pro forma financial statements.

A typical corporate planning process will encompass

Which of the following expenses should be included as a cash outlay in the preparation of a cash budget?

Long-term financial planning results in

Which of the following is a spontaneous source of financing?

Considering each action independently and holding other things constant, which of the following actions would increase a firm's discretionary financing needed (the need for additional capital)?

Which of the following is the correct method of determining discretionary financing needed (DFN)?

Banner's projected current assets for 2018 are

Banner's projected long-term debt for 2018 is

The "percentage" used in the percent-of-sales calculation can be obtained from

Strategic planning encompasses all of the following EXCEPT:

Getting Started-Principles of Finance

Firms and the Financial Market

Understanding Financial Statements, Taxes, and Cash Flows

Financial Analysis-Sizing up Firm Performance

Time Value of Money-The Basics

The Time Value of Money-Annuities and Other Topics

An Introduction to Risk and Return-History of Financial Market Returns

Risk and Return-Capital Market Theory

Debt Valuation and Interest Rates

Stock Valuation

Investment Decision Criteria

Analyzing Project Cash Flows

Risk Analysis and Project Evaluation

The Cost of Capital

Capital Structure Policy

Dividend Policy

Working Capital Management

International Business Finance

Corporate Risk Management

Filters