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Exam 18: Financial Management

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Question 81

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Budgets are prepared after the financial forecasts are developed.

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Question 82

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Sarah intends to major in finance and find employment in corporate financial management.As a finance major,Sarah will discover her ________ knowledge to be valuable in mastering the objectives of her finance classes.

A) marketing
B) psychology
C) sociology
D) accounting

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Question 83

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_________ offers financially stable corporations a technique to raise short-term funds by issuing unsecured promissory notes to the general public with the promise of repayment within 270 days.

Accepting credit cards,such as MasterCard or Visa,enables a firm to decrease the expense of extending credit to customers.

Reality Films,Inc.is a very profitable company whose stock has appreciated in market value during the past ten years.Even though the firm was established several years ago,it does not pay its stockholders dividends.Reality Films reinvests its earnings.Which of the following statements might best reflect the sentiments of its chief financial officer CFO) ?

Central Vermont Power issued $200 million of bonds to finance a major upgrade of one of its largest power plants.The issuance of these bonds indicates that Central Vermont utilizes equity capital to meet its long-term financing needs.

Explain the term leverage.When is it more favorable for firms to use this strategy?

After much searching,Mort located an old banking friend of his father's.The banker offered Mort up to $25,000 in unsecured funds,which Mort's firm could borrow any time within a year,as long as the bank has the money available.Mort was offered an) :

After thoroughly studying the feasibility for expansion,Preferred Pet Care Inc,a mobile pet care company that operates in the greater Chicago area,plans to offer a similar service in the Indianapolis metropolitan are A.This endeavor will require a large capital expenditure.Due to the nature of this project,the firm will only consider equity financing.

Is there something in a name? April Gardner was told that she would grow-up to be a "master gardener".She didn't really believe that stuff,but now she finds herself in charge at a large city-owned botanical garden.She is requiring her staff to pursue continuing education.To put her money where her mouth is,she will enroll in a couple of accounting and finance courses at the local community college because this is an area where she is weak.This is a good plan - especially since she is the boss.

What is financial management? Identify the duties and responsibilities of financial managers.

To be effective,an internal auditor must be critical of any improprieties or deficiencies found in the financial activities of the firm.

The rationale behind offering customers credit is:

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

While firms finance their long-term needs with debt financing,their short-term needs are served by equity financing.

The cost of capital is the rate of return a firm must earn in order to meet the demands of its lenders and expectations of its equity holders.

A comptroller is the chief accounting officer of an organization.

Arborview Plant Science Company has invented a drought resistant grass seed that only needs watering three times each year.In order to expand distribution world wide,the company whose product produces lush green foliage needs serious funding.The handful of seed scientists that own the company are seeking ____________,but understand that they will relinquish a sizeable share of ownership in order to obtain the funds.

The rate of return a company must earn to meet the demands of its lenders and expectations of its equity holders is called:

No matter the size of the business,finance is a critical activity for: