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Exam 17: Financial Management Appendix C Managing Risk

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Question 101

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A ______forecast predicts the revenues,costs,and expenses a firm will incur for a period longer than one year.

A) cash flow
B) long-term
C) short-term
D) capital expenditures

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

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Question 102

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Obtaining long-term financing:

A) is generally not available to small businesses.
B) is normally provided by trade credit.
C) occupies the majority of a finance manager's day.
D) is available through pledging accounts receivable.

E) All of the above
F) A) and D)

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Question 103

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Which business function involves collecting payments from customers?

Finance is the function in a business that acquires,manages,and plans for the expenditure of funds.

Budgets assist managers in performing the functions of planning and control.

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 3 days of the billing date.

is the function in business that is responsible for acquiring funds for the firm,and managing funds within the firm.

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

As a management consultant,Lamont knows that regardless of how good a firm's product might be,the firm has little chance of success without a(n) :

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

By identifying variances from the financial plan,managers are able to focus on those departments that require corrective action.

Trade credit represents one of the most expensive forms of short-term financing.

Tax payments represent a cash inflow to a firm.

The FeelsoGood Furniture Stores often rely on factoring to meet their short-term financing needs.This means that FeelsoGood borrows money from a finance company and pledges its accounts receivables as collateral.

The primary focus of a cash flow forecast is the firm's revenue and costs for the current operating period.

The concept of the time value of money indicates that:

Rod was required to pledge his house and car as collateral for a loan he received from CIBC.The money from the loan was used to start his new business,which unfortunately failed within 6 months.The bank can now claim Rod's house and car to satisfy their claims.

Family and friends represent the most important source of credit for most small businesses.

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.

A revolving credit agreement represents a line of credit that is guaranteed.