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Exam 18: Financial Management

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Question 161

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Financial managers use data prepared by accountants to develop strategies for improving the financial performance of the firm.

A) True
B) False

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Question 162

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Backstreet Books is seeking financing to fund the opening of two more locations in a major university town.There is no need to consider debt financing for this project.It will require a sizeable investment in equity funds.

A) True
B) False

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Question 163

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Unlike bonds,stocks offer the advantage of tax-deductible interest payments.

As a financial manager for a large manufacturing firm,Gail evaluates the purchase of expensive machinery and construction of new facilities.She is analyzing capital expenditure proposals.

The most widely used source of short-term funding is:

Investors and entrepreneurs should have an understanding of financial issues.

Although best used as a last resort,many small businesses find it convenient to use __________ as a short-term source of financing.Although this form short-term debt comes with high interest rates,it provides a quick line of credit for many firms,including start-up companies who may not be able to secure bank loans.

Carlos is the manager of Oh! Canada Sporting Goods.During the past six months,his cash expenditures have exceeded his cash receipts.Oh! Canada is suffering from a(n) ________ problem.

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

Inability to attract and retain qualified employees is one of the most common ways for a firm to fail financially.

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

An unsecured corporate bond is known as a debenture bond.

One step in the financial planning process is to establish financial control procedures that allow managers to monitor the organization's performance.

Allison Robards,owner of Backstreet Books,an eclectic bookstore near a large university,is seeking additional financing for books and CDs that she plans to buy and sell in the same fiscal year.Even though it will be a sizeable investment in inventory,Allison is seeking short-term financing.