Question 1

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 difficultiesE) None of the above
F) All of the above

Question 2

If a company secures a one-year bank loan it is considered _______.

Accepted Answer

A)  short-term financing
B)  asset funding
C)  liability funding
D)  long-term financingE) B) and C)
F) A) and D)

Question 3

A budget reflects management's expectations for revenues and allocates the use of specific resources throughout the firm.

Accepted Answer

A) True 
 B)False

Question 4

The concept,"time value of money" indicates:

Accepted Answer

A)  the value of a dollar decreases over time as prices increase.
B)  the prices of goods and services will fluctuate over time due to inflation and higher costs of production.
C)  monetary systems tend to become more sophisticated over time.
D)  a dollar received today is worth more than a dollar received a year from today.E) C) and D)
F) All of the above

Question 5

The timing of a short-term forecast is more important than the forecast's accuracy.

Accepted Answer

A) True 
 B)False

Question 6

Carolina Financial Services is considering the purchase and installation of an expensive computer network.This is the type of expenditure that would be included in an) :

Accepted Answer

A)  capital budget.
B)  cash budget.
C)  operating budget.
D)  asset budget.E) None of the above
F) B) and C)

Question 7

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) B) and D)
F) A) and D)

Question 8

If a buyer is offered the terms of sale of "3/10,net 30" this means that the buyer can receive a 10 percent discount by making full payment within 30 days of the billing date.

Accepted Answer

A) True 
 B)False

Question 9

The chief financial officer of a company is responsible for managing cash,accounts receivable,and inventory.

Accepted Answer

A) True 
 B)False

Question 10

A capital budget highlights the expected funds provided by owner investments.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following would normally involve long-term financing?

Accepted Answer

A)  Worker's salaries
B)  Unanticipated emergencies
C)  Purchase of modern equipment
D)  Expanding current inventoryE) B) and D)
F) None of the above

Question 12

The chief financial officer CFO)is responsible for accounting and financial functions.

Accepted Answer

A) True 
 B)False

Question 13

Tri-State Concrete Construction Company relies on factoring to meet its short-term financing needs.This means that Tri-State borrows money from a finance company and pledges its accounts receivable as collateral.

Accepted Answer

A) True 
 B)False

Question 14

Long-term loans are often more expensive than short-term loans.

Accepted Answer

A) True 
 B)False

Question 15

As a financial manager for a large manufacturing firm,Gail evaluates the purchase of expensive machinery and construction of new facilities.She is analyzing capital expenditure proposals.

Accepted Answer

A) True 
 B)False

Question 16

The duties and responsibilities of a financial manager are virtually identical to the duties and responsibilities of an accountant.

Accepted Answer

A) True 
 B)False

Question 17

Charging interest on past due customer accounts reflects that:

Accepted Answer

A)  credit sales cost more to manage than they are worth.
B)  credit customers receive preferential treatment.
C)  money has a time value.
D)  government regulations protect customers who are late in making payments.E) None of the above
F) A) and B)

Question 18

Capital expenditures are major investments in long-term assets such as property and equipment.

Accepted Answer

A) True 
 B)False

Question 19

Many small businesses rely on factoring as a source of short-term financing because:

Accepted Answer

A)  factoring provides a much cheaper source of funds than bank loans.
B)  interest paid to a factor qualifies for a tax credit.
C)  small firms often find it difficult to qualify for bank loans.
D)  loans provided by factors do not require collateral.E) A) and B)
F) A) and C)

Question 20

Big Ticket Technologies holds commercial paper issued by Prude Insurance Corporation that matures in 180 days.However,shortly after Big Ticket purchased the commercial paper,Prude Insurance went out of business.The finance manager for Big Ticket is not worried because his loan to the corporation is secured by collateral that he can now claim.

Accepted Answer

A) True 
 B)False

Exam 18: Financial Management

As a financial manager for a large manufacturing firm,Gail evaluates the purchase of expensive machinery and construction of new facilities.She is analyzing capital expenditure proposals.

Correct Answer
verified

If a buyer is offered the terms of sale of "3/10,net 30" this means that the buyer can receive a 10 percent discount by making full payment within 30 days of the billing date.

Correct Answer
verified

The concept,"time value of money" indicates:

Correct Answer
verified

Tri-State Concrete Construction Company relies on factoring to meet its short-term financing needs.This means that Tri-State borrows money from a finance company and pledges its accounts receivable as collateral.

Correct Answer
verified

Carolina Financial Services is considering the purchase and installation of an expensive computer network.This is the type of expenditure that would be included in an) :

Correct Answer
verified

The timing of a short-term forecast is more important than the forecast's accuracy.

Correct Answer
verified

A capital budget highlights the expected funds provided by owner investments.

Correct Answer
verified

Which of the following would normally involve long-term financing?

Correct Answer
verified

Long-term loans are often more expensive than short-term loans.

Correct Answer
verified

If a company secures a one-year bank loan it is considered _______.

Correct Answer
verified

A budget reflects management's expectations for revenues and allocates the use of specific resources throughout the firm.

Correct Answer
verified

Charging interest on past due customer accounts reflects that:

Correct Answer
verified

The duties and responsibilities of a financial manager are virtually identical to the duties and responsibilities of an accountant.

Correct Answer
verified

Capital expenditures are major investments in long-term assets such as property and equipment.

Correct Answer
verified

Many small businesses rely on factoring as a source of short-term financing because:

Correct Answer
verified

The chief financial officer of a company is responsible for managing cash,accounts receivable,and inventory.

Correct Answer
verified

The chief financial officer CFO)is responsible for accounting and financial functions.

Correct Answer
verified

Venture capital firms look to invest their funds in firms that __________.

Correct Answer
verified

Correct Answer
verified

Which of these statements about corporate bonds is correct?

Correct Answer
verified

Exam 18: Financial Management

As a financial manager for a large manufacturing firm,Gail evaluates the purchase of expensive machinery and construction of new facilities.She is analyzing capital expenditure proposals.

Correct AnswerverifiedShow Answer

If a buyer is offered the terms of sale of "3/10,net 30" this means that the buyer can receive a 10 percent discount by making full payment within 30 days of the billing date.

Correct AnswerverifiedShow Answer

The concept,"time value of money" indicates:

Correct AnswerverifiedShow Answer

Tri-State Concrete Construction Company relies on factoring to meet its short-term financing needs.This means that Tri-State borrows money from a finance company and pledges its accounts receivable as collateral.

Correct AnswerverifiedShow Answer

Carolina Financial Services is considering the purchase and installation of an expensive computer network.This is the type of expenditure that would be included in an) :

Correct AnswerverifiedShow Answer

The timing of a short-term forecast is more important than the forecast's accuracy.

Correct AnswerverifiedShow Answer

A capital budget highlights the expected funds provided by owner investments.

Correct AnswerverifiedShow Answer

Which of the following would normally involve long-term financing?

Correct AnswerverifiedShow Answer

Long-term loans are often more expensive than short-term loans.

Correct AnswerverifiedShow Answer

If a company secures a one-year bank loan it is considered _______.

Correct AnswerverifiedShow Answer

A budget reflects management's expectations for revenues and allocates the use of specific resources throughout the firm.

Correct AnswerverifiedShow Answer

Charging interest on past due customer accounts reflects that:

Correct AnswerverifiedShow Answer

The duties and responsibilities of a financial manager are virtually identical to the duties and responsibilities of an accountant.

Correct AnswerverifiedShow Answer

Capital expenditures are major investments in long-term assets such as property and equipment.

Correct AnswerverifiedShow Answer

Many small businesses rely on factoring as a source of short-term financing because:

Correct AnswerverifiedShow Answer

The chief financial officer of a company is responsible for managing cash,accounts receivable,and inventory.

Correct AnswerverifiedShow Answer

The chief financial officer CFO)is responsible for accounting and financial functions.

Correct AnswerverifiedShow Answer

Venture capital firms look to invest their funds in firms that __________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of these statements about corporate bonds is correct?

Correct AnswerverifiedShow Answer

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