Question 1

represent the most favoured source of meeting long-term financing needs because there are no interest payments,dividends,or underwriting fees required when using this source.

Accepted Answer

A)  Retained earnings
B)  Debentures
C)  Secured bonds
D)  WarrantsE) A) and C)
F) A) and D) A

Question 2

The financial manager of Caroline Graphics negotiated a ______with her bank that allows Caroline to borrow up to $50,000 without collateral.This arrangement eliminates the need to renegotiate the terms of the loan and complete new paper work each time Caroline borrows money.The preapproved loan agreement is contingent upon the bank having the funds available.

Accepted Answer

A)  line of credit
B)  renewable income option
C)  cash flow conversion
D)  factor agreementE) B) and C)
F) B) and D)

Question 3

Effective financial managers evaluate customers' ability to pay for merchandise purchased on credit.

Accepted Answer

A) True 
 B)False

Question 4

Equity financing must be repaid.

Accepted Answer

A) True 
 B)False

Question 5

The last step in the financial planning process is to establish financial controls.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Utilizing equity financing may result in new owners buying an interest in the firm.

Accepted Answer

A) True 
 B)False

Question 8

A______ represents a long-term debt obligation issued by a corporation or government.

Accepted Answer

A)  certificate of deposit
B)  bond
C)  commercial note
D)  share of stockE) A) and D)
F) B) and C)

Question 9

______represents funds acquired for major purchases that will be repaid over a year or longer.

Accepted Answer

A)  Long-term financing
B)  Short-term financing
C)  Asset funding
D)  Liability fundingE) A) and C)
F) C) and D)

Question 10

An unsecured corporate bond is known as a debenture bond.

Accepted Answer

A) True 
 B)False

Question 11

A well-known finance designation is the CFA designation.

Accepted Answer

A) True 
 B)False  True

Question 12

Charging interest on past due customer accounts reflects that:

Accepted Answer

A)  credit customers receive preferential treatment.
B)  government regulations protect customers who are late in making payments.
C)  money has a time value.
D)  credit sales cost more to manage than they are worth.E) A) and D)
F) All of the above C

Question 13

Budgets are prepared after the financial forecasts are developed.

Accepted Answer

A) True 
 B)False

Question 14

Lancer Wholesale Company wants to improve cash flow provided by accounts receivable collections.Which of the following strategies would be most likely to help Lancer achieve this objective?

Accepted Answer

A)  Offering cash discounts to buyers who pay their accounts promptly.
B)  Offering extended payment plans to qualified buyers.
C)  Accepting IOUs from customers who buy in large quantities.
D)  Relaxing its credit policy for new customers.E) A) and D)
F) B) and C)

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

One of the challenges of effective financial management is:

Accepted Answer

A)  working within the strict regulations of the Financial Accounting Standards Board (FAS
B)  .
B)  to have sufficient cash on hand without compromising the firm's investment potential.
C)  providing the financial data in a timely manner for management consultants to improve decision making.
D)  ensuring the satisfaction of each of the stakeholder groups.E) A) and C)
F) B) and D)

Question 17

Bankers are often reluctant to make loans to small businesses.

Accepted Answer

A) True 
 B)False

Question 18

Long-term financing is used to buy long-lived assets,such as buildings and equipment.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

A debenture is a special type of stock that pays a higher dividend than common stock.

Accepted Answer

A) True 
 B)False

Exam 17: Financial Management Appendix C Managing Risk

represent the most favoured source of meeting long-term financing needs because there are no interest payments,dividends,or underwriting fees required when using this source.

Correct Answer
verified
A

Correct Answer
verified

Effective financial managers evaluate customers' ability to pay for merchandise purchased on credit.

Correct Answer
verified

Equity financing must be repaid.

Correct Answer
verified

The last step in the financial planning process is to establish financial controls.

Correct Answer
verified

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

Correct Answer
verified

Utilizing equity financing may result in new owners buying an interest in the firm.

Correct Answer
verified

A______ represents a long-term debt obligation issued by a corporation or government.

Correct Answer
verified

______represents funds acquired for major purchases that will be repaid over a year or longer.

Correct Answer
verified

An unsecured corporate bond is known as a debenture bond.

Correct Answer
verified

A well-known finance designation is the CFA designation.

Correct Answer
verified
True

Charging interest on past due customer accounts reflects that:

Correct Answer
verified
C

Budgets are prepared after the financial forecasts are developed.

Correct Answer
verified

Lancer Wholesale Company wants to improve cash flow provided by accounts receivable collections.Which of the following strategies would be most likely to help Lancer achieve this objective?

Correct Answer
verified

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

Correct Answer
verified

One of the challenges of effective financial management is:

Correct Answer
verified

Bankers are often reluctant to make loans to small businesses.

Correct Answer
verified

Long-term financing is used to buy long-lived assets,such as buildings and equipment.

Correct Answer
verified

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

Correct Answer
verified

A debenture is a special type of stock that pays a higher dividend than common stock.

Correct Answer
verified

Exam 17: Financial Management Appendix C Managing Risk

represent the most favoured source of meeting long-term financing needs because there are no interest payments,dividends,or underwriting fees required when using this source.

Correct AnswerverifiedA

Correct AnswerverifiedShow Answer

Effective financial managers evaluate customers' ability to pay for merchandise purchased on credit.

Correct AnswerverifiedShow Answer

Equity financing must be repaid.

Correct AnswerverifiedShow Answer

The last step in the financial planning process is to establish financial controls.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Utilizing equity financing may result in new owners buying an interest in the firm.

Correct AnswerverifiedShow Answer

A______ represents a long-term debt obligation issued by a corporation or government.

Correct AnswerverifiedShow Answer

______represents funds acquired for major purchases that will be repaid over a year or longer.

Correct AnswerverifiedShow Answer

An unsecured corporate bond is known as a debenture bond.

Correct AnswerverifiedShow Answer

A well-known finance designation is the CFA designation.

Correct AnswerverifiedTrue

Charging interest on past due customer accounts reflects that:

Correct AnswerverifiedC

Budgets are prepared after the financial forecasts are developed.

Correct AnswerverifiedShow Answer

Lancer Wholesale Company wants to improve cash flow provided by accounts receivable collections.Which of the following strategies would be most likely to help Lancer achieve this objective?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

One of the challenges of effective financial management is:

Correct AnswerverifiedShow Answer

Bankers are often reluctant to make loans to small businesses.

Correct AnswerverifiedShow Answer

Long-term financing is used to buy long-lived assets,such as buildings and equipment.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A debenture is a special type of stock that pays a higher dividend than common stock.

Correct AnswerverifiedShow Answer

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified