Question 1

In capital budgeting,all assets and projects must be continually reevaluated to ensure they remain compatible with the organization's needs.

Accepted Answer

A) True 
 B)False

Question 2

What part of its business does Glasspray have a difficult time managing?

Accepted Answer

A)   Sales
B)   Marketing
C)   Its staff
D)   Current assets and liabilities
E)   Maintaining profitabilityF) C) and E)
G) B) and D)

Question 3

The ______ is the interest rate commercial bank lenders charge their best customers.

Accepted Answer

A)   factor
B)   prime rate
C)   subprime rate
D)   credit line
E)   trade rateF) C) and D)
G) A) and E)

Question 4

Unsecured loans are backed by collateral that the lender can claim if the borrower does not repay the loan.

Accepted Answer

A) True 
 B)False

Question 5

The capital in excess of par account is usually significantly smaller than the par value account on a balance sheet.

Accepted Answer

A) True 
 B)False

Question 6

Eurodollar deposits can only be made at banks located in London.

Accepted Answer

A) True 
 B)False

Question 7

Most business failures are the result of poor long-term financial planning.

Accepted Answer

A) True 
 B)False

Question 8

Good financial managers minimize the amount of cash available to pay bills in

Accepted Answer

A)   marketable securities.
B)   transaction balances.
C)   inventory.
D)   the float.
E)   banker's acceptances.F) A) and E)
G) C) and E)

Question 9

The last in line for the payment of profits are the

Accepted Answer

A)   bondholders.
B)   common stockholders.
C)   preferred stockholders.
D)   government.
E)   customers.F) B) and E)
G) A) and E)

Question 10

Long-term assets are

Accepted Answer

A)   easily made liquid.
B)   convertible to cash in less than six months.
C)   expected to last for many years.
D)   liabilities.
E)   dividends.F) B) and D)
G) C) and D)

Question 11

Long-term liabilities are

Accepted Answer

A)   debts that are due in less than six months.
B)   debts that will be repaid over a number of years.
C)   Eurodollars.
D)   trade credit.
E)   retained earnings.F) C) and D)
G) B) and E)

Question 12

Retained earnings may be used to finance long-term assets.

Accepted Answer

A) True 
 B)False

Question 13

How do firms optimize inventory?

Accepted Answer

The object is to minimize the firm's inv...

Question 14

If a company retains all of its earnings,then it will not pay

Accepted Answer

A)   dividends.
B)   taxes.
C)   expenses.
D)   bills.
E)   suppliers.F) B) and E)
G) B) and D)

Question 15

Current assets include all of the following except

Accepted Answer

A)   accounts receivable.
B)   accounts payable.
C)   investments.
D)   inventory.
E)   cash.F) A) and E)
G) C) and D)

Question 16

Two common means of financing with long-term liabilities are equity financing and debt financing.

Accepted Answer

A) True 
 B)False

Question 17

Explain the risk factors a firm must assess when considering an investment in a new asset.

Accepted Answer

When considering the risk associated wit...

Question 18

The face value of a bond,its initial sales price,is typically ____.

Accepted Answer

A)   $1
B)   $10
C)   $100
D)   $1,000
E)   $10,000F) D) and E)
G) A) and D)

Question 19

The over-the-counter securities market

Accepted Answer

A)   trades most corporate bonds and all U.S.government securities.
B)   is only for small companies just getting started.
C)   is not as current in its quotes as the NYSE.
D)   is located in Philadelphia.
E)   is located in Chicago.F) A) and B)
G) A) and C)

Question 20

A method of long-term financing that requires repaying funds with interest is

Accepted Answer

A)   issuing bonds.
B)   using retained earnings.
C)   issuing stocks.
D)   buying insurance.
E)   using trade credit.F) A) and E)
G) B) and E)

Exam 16: Financial Management and Securities Markets

Long-term assets are

Correct AnswerverifiedShow Answer

The over-the-counter securities market

Correct AnswerverifiedShow Answer

Eurodollar deposits can only be made at banks located in London.

Correct AnswerverifiedShow Answer

Most business failures are the result of poor long-term financial planning.

Correct AnswerverifiedShow Answer

Current assets include all of the following except

Correct AnswerverifiedShow Answer

A method of long-term financing that requires repaying funds with interest is

Correct AnswerverifiedShow Answer

The ______ is the interest rate commercial bank lenders charge their best customers.

Correct AnswerverifiedShow Answer

Long-term liabilities are

Correct AnswerverifiedShow Answer

How do firms optimize inventory?

Correct AnswerverifiedThe object is to minimize the firm's inv...View AnswerShow Answer

If a company retains all of its earnings,then it will not pay

Correct AnswerverifiedShow Answer

What part of its business does Glasspray have a difficult time managing?

Correct AnswerverifiedShow Answer

In capital budgeting,all assets and projects must be continually reevaluated to ensure they remain compatible with the organization's needs.

Correct AnswerverifiedShow Answer

Unsecured loans are backed by collateral that the lender can claim if the borrower does not repay the loan.

Correct AnswerverifiedShow Answer

Explain the risk factors a firm must assess when considering an investment in a new asset.

Correct AnswerverifiedWhen considering the risk associated wit...View AnswerShow Answer

The last in line for the payment of profits are the

Correct AnswerverifiedShow Answer

Good financial managers minimize the amount of cash available to pay bills in

Correct AnswerverifiedShow Answer

Two common means of financing with long-term liabilities are equity financing and debt financing.

Correct AnswerverifiedShow Answer

The face value of a bond,its initial sales price,is typically ____.

Correct AnswerverifiedShow Answer

The capital in excess of par account is usually significantly smaller than the par value account on a balance sheet.

Correct AnswerverifiedShow Answer

Retained earnings may be used to finance long-term assets.

Correct AnswerverifiedShow Answer

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
The object is to minimize the firm's inv...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
When considering the risk associated wit...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified