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Exam 18: Financial Management

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Question 61

Multiple Choice

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A _________ forecast predicts the revenues,costs,and expenses a firm will incur for a period of one year or less.

A) near-horizon
B) short-term
C) capital expenditures
D) tactical

E) A) and B)
F) C) and D)

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Question 62

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

A) True
B) False

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Question 63

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When it involves securing capital,the recession has not affected small businesses as much as large businesses.

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

As the owner of Kingdom's Treasures,Jerry negotiates with suppliers who hope to place their products in his high volume retail gift store.Jerry finances his inventory through the ________ credit offered by suppliers who delay his payments for up to 60 days after the merchandise has been delivered to his business.

Successful use of financial leverage requires a firm to:

Inadequate control of expenses represents a common financial problem that contributes to business failure.

Which of the following represents a source of short-term funding?

.Firms that fail to take advantage of this early payment discount are giving up approximately 36%.

___________ refers to the process that identifies variances by comparing actual revenues and expenses to projected revenues and expenses.

Central Vermont Power issued $200 million of bonds to finance a major upgrade of one of its largest power plants.The issuance of these bonds indicates that Central Vermont utilizes equity capital to meet its long-term financing needs.

Lending institutions may offer a borrower a percentage of the value of the borrower's accounts receivable so the borrowing firm can continue to operate while it waits to collect on its credit sales.This process is called __________.

A firm will choose to seek debt financing only for the purpose of paying for short-term operating needs.

A just-in-time inventory system allows a firm to:

According to the Legal Briefcase box in Chapter 18,international factoring is also called "forfeiting."

A company's capital budget helps management plan for cash shortages or surpluses.

The budget that estimates a firm's projected cash inflows and outflows,as well as cash shortages or surpluses during a given time period is called the ________ budget.

Carlos wants to know the income potential for his computer consulting business during the next five years.Which of the following would be most helpful?

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

Successful businesses establish restrictive credit policies encouraging customers to pay cash.