Question 1

Winter Haven, Florida has begun charging victims of accidents a fee when police officers and firefighters respond to the scene of the accident. In order to alleviate problems during recessions, cities, counties, and even states must pass along some of the costs that are normally covered by taxes.

Accepted Answer

A)   accounts payable
B)   inventory
C)   cash flow
D)   capital expenditureE) None of the above
F) B) and C)

Question 2

The interest paid on represents a tax deductible business expense.

Accepted Answer

A)   bonds
B)   stock
C)   retained earnings
D)   depreciated assetsE) B) and C)
F) A) and D)

Question 3

The duties and responsibilities of a financial manager are virtually identical to the duties and responsibilities of an accountant.

Accepted Answer

A) True 
 B)False

Question 4

Big Bear Ski Lodge's cash budget for the month of March, 2010, shows a negative amount. Due to the fact that the months of January and February were quite lucrative and showed positive amounts, the finance manager will not borrow any money on the short-term to cover for March's deficit.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is most accurate?

Accepted Answer

A)   Accounting and finance are not related.
B)   Financial managers keep the books for a firm.
C)   Financial managers need to understand accounting.
D)   Nonprofit organizations must choose between accounting and finance.E) B) and D)
F) B) and C)

Question 6

Which of the following represents a capital expenditure?

Accepted Answer

A)   issuing paychecks to workers
B)   paying for advertising on a local radio station
C)   purchasing raw materials to be used in the production of a firm's product
D)   purchasing a building to be used for office spaceE) B) and D)
F) C) and D)

Question 7

Commercial paper is unsecured short-term debt.

Accepted Answer

A) True 
 B)False

Question 8

According to the boxed material entitled "Legal Briefcase" in Chapter 18, which of the following describes international factoring?

Accepted Answer

A)   Middlemen ensure that the seller receives the payment from a foreign buyer.
B)   A company sells its future accounts receivables to a lending bank to finance their export activities.
C)   A company borrows money from an international banker, pledging inventories held in more than one country as collateral.
D)   An intermediary financial institution issues shares of ownership to investors in different countries.E) None of the above
F) C) and D)

Question 9

As a result of cash flow shortages, Millard's Department Stores has fallen behind in payments to suppliers. Some suppliers are withholding shipments to Millard's until they receive payments on overdue accounts. To meet their immediate needs, Millard's Department Stores should utilize:

Accepted Answer

A)   vulture capital.
B)   long-term financing.
C)   contingency capital.
D)   short-term financing.E) A) and B)
F) C) and D)

Question 10

examine the data prepared by and then make recommendations to top management regarding strategies for improving the firm.

Accepted Answer

A)   Accountants; financial managers
B)   Accountants; bankers
C)   Financial managers; accountants
D)   Financial managers; bankersE) None of the above
F) A) and B)

Question 11

provide financing to new or emerging companies with high profit potential. In return, these organizations expect a share of ownership in the company.

Accepted Answer

A)   Commercial banks
B)   Venture capital firms
C)   Federal Reserve banks
D)   Investment bankersE) All of the above
F) A) and B)

Question 12

Financial control is a process where firms compare actual revenues and costs with budgeted revenues and costs.

Accepted Answer

A) True 
 B)False

Question 13

When Liberty Industries renegotiated their loan agreement, they borrowed an additional $2 million. The new loan requires Liberty to repay the new amount in nine months. Liberty's activity represents financing.

Accepted Answer

A)   equity
B)   debt
C)   revitalized
D)   securedE) None of the above
F) B) and D)

Question 14

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

Accepted Answer

A) True 
 B)False

Exam 18: Financial Management

The interest paid on represents a tax deductible business expense.

Correct Answer
verified

Which of the following statements is most accurate?

Correct Answer
verified

Financial control is a process where firms compare actual revenues and costs with budgeted revenues and costs.

Correct Answer
verified

According to the boxed material entitled "Legal Briefcase" in Chapter 18, which of the following describes international factoring?

Correct Answer
verified

provide financing to new or emerging companies with high profit potential. In return, these organizations expect a share of ownership in the company.

Correct Answer
verified

As a result of cash flow shortages, Millard's Department Stores has fallen behind in payments to suppliers. Some suppliers are withholding shipments to Millard's until they receive payments on overdue accounts. To meet their immediate needs, Millard's Department Stores should utilize:

Correct Answer
verified

Big Bear Ski Lodge's cash budget for the month of March, 2010, shows a negative amount. Due to the fact that the months of January and February were quite lucrative and showed positive amounts, the finance manager will not borrow any money on the short-term to cover for March's deficit.

Correct Answer
verified

The duties and responsibilities of a financial manager are virtually identical to the duties and responsibilities of an accountant.

Correct Answer
verified

Winter Haven, Florida has begun charging victims of accidents a fee when police officers and firefighters respond to the scene of the accident. In order to alleviate problems during recessions, cities, counties, and even states must pass along some of the costs that are normally covered by taxes.

Correct Answer
verified

When Liberty Industries renegotiated their loan agreement, they borrowed an additional $2 million. The new loan requires Liberty to repay the new amount in nine months. Liberty's activity represents financing.

Correct Answer
verified

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

Correct Answer
verified

examine the data prepared by and then make recommendations to top management regarding strategies for improving the firm.

Correct Answer
verified

Which of the following represents a capital expenditure?

Correct Answer
verified

Commercial paper is unsecured short-term debt.

Correct Answer
verified

Exam 18: Financial Management

The interest paid on represents a tax deductible business expense.

Correct AnswerverifiedShow Answer

Which of the following statements is most accurate?

Correct AnswerverifiedShow Answer

Financial control is a process where firms compare actual revenues and costs with budgeted revenues and costs.

Correct AnswerverifiedShow Answer

According to the boxed material entitled "Legal Briefcase" in Chapter 18, which of the following describes international factoring?

Correct AnswerverifiedShow Answer

provide financing to new or emerging companies with high profit potential. In return, these organizations expect a share of ownership in the company.

Correct AnswerverifiedShow Answer

As a result of cash flow shortages, Millard's Department Stores has fallen behind in payments to suppliers. Some suppliers are withholding shipments to Millard's until they receive payments on overdue accounts. To meet their immediate needs, Millard's Department Stores should utilize:

Correct AnswerverifiedShow Answer

Big Bear Ski Lodge's cash budget for the month of March, 2010, shows a negative amount. Due to the fact that the months of January and February were quite lucrative and showed positive amounts, the finance manager will not borrow any money on the short-term to cover for March's deficit.

Correct AnswerverifiedShow Answer

The duties and responsibilities of a financial manager are virtually identical to the duties and responsibilities of an accountant.

Correct AnswerverifiedShow Answer

Winter Haven, Florida has begun charging victims of accidents a fee when police officers and firefighters respond to the scene of the accident. In order to alleviate problems during recessions, cities, counties, and even states must pass along some of the costs that are normally covered by taxes.

Correct AnswerverifiedShow Answer

When Liberty Industries renegotiated their loan agreement, they borrowed an additional $2 million. The new loan requires Liberty to repay the new amount in nine months. Liberty's activity represents financing.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

examine the data prepared by and then make recommendations to top management regarding strategies for improving the firm.

Correct AnswerverifiedShow Answer

Which of the following represents a capital expenditure?

Correct AnswerverifiedShow Answer

Commercial paper is unsecured short-term debt.

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified