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Exam 18: Financial Management

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Question 151

Multiple Choice

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By purchasing stock in Entertainment Today,Veronica has become an) ________ the company.

A) creditor of
B) owner of
C) general partner of
D) venture capitalist in

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verified

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Question 152

Multiple Choice

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Drew's work in the finance department of his firm consists of checking accounting records and financial statements to verify that proper procedures are followed.Drew serves his company as an) :

A) internal auditor.
B) comptroller.
C) CPA
D) financial advisor.

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Question 153

True/False

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Financial managers are responsible for budgeting,auditing,and advising top management on financial matters.

Admiral Electric is a widely known,successful manufacturer of industrial motors and related equipment.When Admiral Electric anticipates a need for short-term funds,it offers unsecured promissory notes to investors for 180 days.To obtain short-term financing,Admiral Electric utilizes:

Offering cash discounts to customers who pay their bills by a certain date represents an effective technique to manage accounts receivable.

The terms of the agreement in a bond issue are referred to as the:

Lending institutions may offer a borrower a percentage of the value of the borrower's accounts receivable so the borrowing firm can continue to operate while it waits to collect on its credit sales.This process is called __________.

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

Companies raising funds must choose either debt or equity sources,but not both.

As a finance manager at AllSports Communication,Charlie worries about the firm's borrowing requirements for the upcoming year.He knows the benefit of estimating AllSports' cash disbursements and short-term investment expectations.Facing these concerns,an) ________ would provide Charlie with valuable information by providing a good estimation of whether the firm will need to do short-term borrowing.

Acquiring funds through debt financing enhances the firm's ability to increase profits.

Maryland Nursery offers customers credit terms of 3/15 net 30.This gives customers a:

The operating master)budget identifies the funds and the allocation of those funds)required to operate a business at a projected level of revenue.

Which of the following companies is undercapitalized?

Allison O'Toole sells high end accessories at her resort boutique in Destin,FL.During the past ten years,Allison's business has performed quite well.Even when she made the decision to expand her store by purchasing the building next door,she financed this event by reinvesting her profits.Up until now,Allison has:

Undercapitalization refers to the problem of insufficient start-up funds.

A ________ refers to a line of credit that is guaranteed by the bank.

Inadequate control of expenses represents a common financial problem that contributes to business failure.

Typically,only highly regarded customers with financial stability receive ___________.

By borrowing $10 million from First Dayton Bank,Hi-Lo Industries is utilizing _________.