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Exam 18: Financial Management

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Question 141

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Acquiring and storing inventory represents a sizable expenditure for many businesses.

A) True
B) False

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Question 142

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A capital budget highlights a firm's spending plans for major assets,such as property,buildings,and equipment.

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B) False

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Question 143

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Financial managers at Sasha Deal Electronics have always had a conservative attitude toward long-term financing.In particular,they are interested in keeping risk to a minimum.This philosophy suggests that managers at Sasha Deal consider the extensive use of leverage an attractive financial strategy.

Equity financing represents funds acquired from within the firm or through the sale of stock,representing ownership in the company.

Which of these is backed only by the reputation of the issuer?

Which of the following is a primary area of concern for financial managers?

The concept of the time value of money is based on the interest-earning power of money.

Mort is seriously considering a major expansion in the size of his funeral home.The money spent on this type of project would be classified as an) :

The first step in the financial planning process is:

Mark manages credit and collections at Polly Parrot Pet Supplies,Inc.He is responsible for accounts receivable and accounts payable.These activities suggest that his job is in financial management.

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 the cash budget will help.

) By selling shares of ownership in their company,California Scientific acquires the funds needed to finance their research and development projects.California Scientific provides for their long-term funding needs through ________ financing.

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

Since commercial finance companies offer loans to higher risk customers than commercial banks,the interest rates they charge are usually ________ than rates charged by banks.

According to the risk/return trade-off,the higher the risk,the lower the interest rate charged by the lender.

Which of the following shows a firm's spending plans on fixed assets such as large equipment?

A comptroller is responsible for the acquiring and managing of funds for an organization.

An) __________ is responsible for verifying that the accounting procedures within a firm are consistent with established accounting principles.

If a firm earns 10% return on funds they borrowed at 15% interest,the owners of the firm realize a benefit from using leverage.

Venture capital is money that is invested in new or emerging companies that are perceived as having great profit potential.