Question 1

Inadequate expense control typically occurs as a result of undercapitalization.

Accepted Answer

A) True 
 B)False

Question 2

Which of these is a common source of long-term financing for a corporation?

Accepted Answer

A)  A revolving credit agreement.
B)  Commercial paper.
C)  A bond issue.
D)  Trade credit.E) A) and B)
F) B) and D)

Question 3

The two primary sources of long-term business financing are government loans and debt capital.

Accepted Answer

A) True 
 B)False

Question 4

A major concern for firms selling on credit is:

Accepted Answer

A)  the realization that many credit customers never pay their bills.
B)  not all firms accept credit cards.
C)  the resulting increase in the debt ratio for the firm.
D)  the inability to utilize factoring as a source of financing.E) B) and C)
F) A) and B)

Question 5

Financial managers often recommend that firms pay their bills as late as possible and try to collect what they are owed as soon as possible.

Accepted Answer

A) True 
 B)False

Question 6

As a financial manager of a small firm,Jerry needs to determine how much his company will have to borrow in the coming months,and when the borrowed funds will be needed.The preparation of a cash budget will help.

Accepted Answer

A) True 
 B)False

Question 7

__________ provide financing to new or emerging companies with high profit potential.In return,these organizations expect a share of ownership in return for the financing they provide.

Accepted Answer

A)  Commercial banks
B)  Venture capital firms
C)  Loansharks
D)  Investment bankersE) B) and C)
F) A) and C)

Question 8

The process of ________ uses a firm's accounts receivable as collateral for a loan.

Accepted Answer

A)  establishing a line of credit
B)  inventory financing
C)  factoring
D)  revolving creditE) A) and B)
F) B) and D)

Question 9

Which of the following activities is most likely to be performed by a financial manager?

Accepted Answer

A)  Design of a marketable product that satisfies an unmet need.
B)  Identification of specific target markets for a firm's goods.
C)  Preparation of the balance sheet and income statement for the firm.
D)  Analysis of the tax implications of various managerial decisions.E) A) and D)
F) C) and D)

Question 10

Retained earnings represent a source of equity financing.

Accepted Answer

A) True 
 B)False

Question 11

To be effective,budgets are prepared independently of organizational forecasts.

Accepted Answer

A) True 
 B)False

Question 12

Venture capital firms look to invest their funds in firms that:

Accepted Answer

A)  operate in established,mature industries.
B)  present financial statements indicating stronger than average cash flows.
C)  are new with great profit potential.
D)  require extra funding to avoid financial difficulties.E) All of the above
F) A) and B)

Question 13

Which of these statements about corporate bonds is correct?

Accepted Answer

A)  Bonds provide equity financing.
B)  Issuing new bonds dilutes the existing ownership in the firm.
C)  Interest paid to bondholders represents a tax deductible business expense.
D)  Debenture bonds require assets pledged as collateral.E) A) and B)
F) All of the above

Exam 17: Financial Management

To be effective,budgets are prepared independently of organizational forecasts.

Correct Answer
verified

Financial managers often recommend that firms pay their bills as late as possible and try to collect what they are owed as soon as possible.

Correct Answer
verified

Which of these is a common source of long-term financing for a corporation?

Correct Answer
verified

Inadequate expense control typically occurs as a result of undercapitalization.

Correct Answer
verified

Which of the following activities is most likely to be performed by a financial manager?

Correct Answer
verified

Which of these statements about corporate bonds is correct?

Correct Answer
verified

The two primary sources of long-term business financing are government loans and debt capital.

Correct Answer
verified

As a financial manager of a small firm,Jerry needs to determine how much his company will have to borrow in the coming months,and when the borrowed funds will be needed.The preparation of a cash budget will help.

Correct Answer
verified

A major concern for firms selling on credit is:

Correct Answer
verified

Retained earnings represent a source of equity financing.

Correct Answer
verified

__________ provide financing to new or emerging companies with high profit potential.In return,these organizations expect a share of ownership in return for the financing they provide.

Correct Answer
verified

The process of ________ uses a firm's accounts receivable as collateral for a loan.

Correct Answer
verified

Venture capital firms look to invest their funds in firms that:

Correct Answer
verified

Exam 17: Financial Management

To be effective,budgets are prepared independently of organizational forecasts.

Correct AnswerverifiedShow Answer

Financial managers often recommend that firms pay their bills as late as possible and try to collect what they are owed as soon as possible.

Correct AnswerverifiedShow Answer

Which of these is a common source of long-term financing for a corporation?

Correct AnswerverifiedShow Answer

Inadequate expense control typically occurs as a result of undercapitalization.

Correct AnswerverifiedShow Answer

Which of the following activities is most likely to be performed by a financial manager?

Correct AnswerverifiedShow Answer

Which of these statements about corporate bonds is correct?

Correct AnswerverifiedShow Answer

The two primary sources of long-term business financing are government loans and debt capital.

Correct AnswerverifiedShow Answer

As a financial manager of a small firm,Jerry needs to determine how much his company will have to borrow in the coming months,and when the borrowed funds will be needed.The preparation of a cash budget will help.

Correct AnswerverifiedShow Answer

A major concern for firms selling on credit is:

Correct AnswerverifiedShow Answer

Retained earnings represent a source of equity financing.

Correct AnswerverifiedShow Answer

__________ provide financing to new or emerging companies with high profit potential.In return,these organizations expect a share of ownership in return for the financing they provide.

Correct AnswerverifiedShow Answer

The process of ________ uses a firm's accounts receivable as collateral for a loan.

Correct AnswerverifiedShow Answer

Venture capital firms look to invest their funds in firms that:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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