FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 18: Financial Management

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 131

Multiple Choice

Review LaterAdd Note

Review Later

________ refers to the strategy of using borrowed funds to increase the rate of return for stockholders.

A) Leverage
B) Retained earnings
C) Factoring
D) Pledging

Correct Answer

verified

Show Answer

Question 132

True/False

Review LaterAdd Note

Review Later

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

Correct Answer

verified

Show Answer

Question 133

True/False

Review LaterAdd Note

Financial managers at Epic Electronics have always had a conservative attitude toward long-term financing. In particular, they are interested in keeping risk to a minimum. This philosophy suggests that managers at Epic consider the extensive use of leverage an attractive financial strategy.

Generally accepted accounting principles require that any assessment of a firm's financial statements be performed by independent outside auditors.

Which of the following statements represents good advice prior to making capital expenditures?

According to the box, Adapting to Change, most online loans are safe with a low interest rate.

Epic Electronics holds commercial paper issued by SafeONE Insurance that matures in 180 days. However, shortly after Epic purchased the commercial paper, SafeONE went out of business. The finance manager for Epic is not worried because his loan to the corporation is secured by collateral that he can now claim.

A debenture bond is backed only by the reputation of the issuer.

To reduce the time and expense of collecting their accounts receivable, some firms

A share of stock represents a company-issued IOU including a promise to repay on a certain date.

The chief financial officer of a company is responsible for managing cash, accounts receivable, and inventory.

Roman, the finance manager at Outdoor Adventure Sporting Goods, has asked his assistant, Vincent, to prepare the ________ budget. Vincent will gather as much information as possible by utilizing the firm's other budgets and any documents that summarize proposed financial activities.

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

________ offer short-term secured loans to high-risk borrowers. These loans usually require collateral.

In order to assist in revenue realization, a(n) ________ allocates resources throughout the firm.

Financial managers understand the time value of money. They try to maximize cash expenditures, as opposed to minimizing cash expenditures.

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

Which of the following provides the buyer with collateral?

Bigbux Savings and Loan agreed to extend Appleman's Orchards $250,000 of unsecured short-term funds, contingent upon the bank having the funds available. This arrangement represents a

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