Question 1

Jacobson Landscaping receives an invoice from one of its suppliers.The amount of the invoice is $30,000 with terms of 2/10, net/30.If the invoice is paid on the fifth day, Jacobson is entitled to a ____ cash discount and will write the check for ____.

Accepted Answer

A)   $6; $29,994
B)   $600; $29,400
C)   $600; $0
D)   $6,000; $29,400
E)   $6,000; $0 B

Question 2

Sanchez Company sells its garden hoses to Gary's Lawn and Garden Center but does not require Gary's to pay for them right away.If this is a standard trade-credit agreement, Gary's will have to pay for the garden hoses in

Accepted Answer

A)   30 to 60 days.
B)   1 to 20 days.
C)   45 to 90 days.
D)   60 to 180 days.
E)   as many days as it takes to sell the merchandise.

Question 3

Debbie Brooks purchased a $1,000 corporate bond that pays 9 percent interest.The face value of her bond is $1,000.What is the amount of interest that she will receive each year?

Accepted Answer

A)   $100
B)   $90
C)   $50
D)   $46.25
E)   $10

Question 4

The usual repayment period for long-term loans is

Accepted Answer

A)   before the end of the first year.
B)   at the end of the first year.
C)   in two to three years.
D)   in three to seven years.
E)   at the end of ten years.

Question 5

Interest on corporate bonds is paid quarterly.

Accepted Answer

A) True 
 B)False

Question 6

Debt capital is borrowed money that does not have to be repaid.

Accepted Answer

A) True 
 B)False

Question 7

The steps in effective financial planning are

Accepted Answer

A)   establishing organizational goals and objectives, identifying expenses, and budgeting.
B)   establishing organizational goals and objectives, budgeting for financial needs, and identifying sources of financing.
C)   developing a plan of action, monitoring the plan, and evaluating.
D)   identifying sources of financing, budgeting, and evaluating.
E)   None of the above are correct.

Question 8

In a revolving credit agreement, the borrower typically pays ____ on the ____ portion of the revolving credit agreement.

Accepted Answer

A)   1.0 to 3.0 percent; unused
B)   1.0 to 3.0 percent; used
C)   only regular interest; used
D)   0.25 to 1.0 percent; used
E)   0.25 to 1.0 percent; unused

Question 9

Long-term loans and the sale of corporate bonds are common sources of equity financing.

Accepted Answer

A) True 
 B)False

Question 10

Trade credit is the most popular form of short-term financing available for most businesses.

Accepted Answer

A) True 
 B)False

Question 11

Sara Lee Corporation is a large conglomerate of businesses participating in a variety of industries.Sara Lee is considering the purchase of Bryan Foods.If Bryan Foods represents a tremendous opportunity to make the company more successful, Sara Lee may as a last resort

Accepted Answer

A)   seek short-term financing.
B)   use trade credit to pay for Bryan Foods.
C)   use future sales revenues now.
D)   share the idea with competitors.
E)   sell assets from another division to pay for Bryan Foods.

Question 12

Morgan's Transition
Morgan is currently a manager of a small financial planning firm.He is seeking a new career with a large corporation in the banking industry.He recently applied for the financial manager opening at G & T Bank.He is concerned that the transition from his small firm to a large corporation will be difficult.To better prepare himself for this change, he has decided to enroll in a few business classes to strengthen his understanding of corporate finance.The business classes have proven to be a valuable tool for learning the critical skills needed to fully understand a financial plan, equity financing, and debt financing.Morgan now believes he has strengthened his competitive advantage in his quest for the job.
-Refer to Morgan's Transition.During his job interview, Morgan was asked to talk about money received from the owners or from the sale of shares of ownership in a business.Which of the following would best describe these funds?

Accepted Answer

A)   debt capital
B)   equity capital
C)   proceeds from a merger or acquisition
D)   proceeds from the sale of assets
E)   sales revenue

Question 13

Business firms usually have more difficulty obtaining short-term financing than long-term financing.

Accepted Answer

A) True 
 B)False

Question 14

Most financial managers consider long-term financing to be money that will be used for longer than one year.

Accepted Answer

A) True 
 B)False

Question 15

Although a corporation does not have to pay dividends on common stock, it is required to pay dividends on preferred stock.

Accepted Answer

A) True 
 B)False

Question 16

Describe the characteristics and traits required for a successful career in financial management.

Accepted Answer

Successful financial management requires a combination of technical skills, analytical abilities, and personal traits.

First and foremost, a strong understanding of financial principles and accounting practices is essential. This includes knowledge of financial statements, budgeting, forecasting, and risk management. Additionally, proficiency in financial software and tools is crucial for effectively managing and analyzing financial data.

Analytical skills are also important for financial managers, as they must be able to interpret complex financial information and make strategic decisions based on their analysis. This involves the ability to identify trends, assess risks, and develop financial strategies to achieve organizational goals.

In addition to technical skills, successful financial managers possess strong communication and interpersonal abilities. They must be able to effectively communicate financial information to non-financial stakeholders, such as senior management or board members. This requires the ability to translate complex financial concepts into clear and understandable language.

Furthermore, financial managers must have strong attention to detail and be able to work well under pressure. They are often responsible for managing large amounts of financial data and must ensure accuracy and compliance with regulations and standards.

Finally, successful financial managers exhibit strong leadership and decision-making skills. They must be able to lead and motivate their teams, as well as make tough decisions that impact the financial health of the organization.

Overall, a successful career in financial management requires a combination of technical expertise, analytical abilities, and personal traits such as communication, attention to detail, and leadership.

Question 17

During 2009, Bedford Technology sold common stock for the first time to whoever wanted to buy it.This was the ____ of Bedford.

Accepted Answer

A)   public stock sale
B)   preferred stock offering
C)   initial public offering
D)   stock dividend
E)   par value C

Question 18

The Fruitiest Candy Company finds that from time to time it needs short-term funds to cover its operating expenses.It wants to establish a prearranged loan with a bank but has not found a bank that will guarantee such a loan.Perplexed by this, the management team asks you how they should proceed.You recommend that they

Accepted Answer

A)   file a suit against the banks.
B)   find a bank out of state or out of the country that will guarantee that the money will be available when needed.
C)   simply file a claim with the FDIC.
D)   retaliate by withdrawing all cash from the local bank and canceling all certificates of deposit.
E)   set up a line of credit with a bank that offers a revolving credit agreement.

Question 19

With regard to ongoing expenses, the most expensive type of long-term financing is the sale of common stock.

Accepted Answer

A) True 
 B)False

Question 20

The most popular form of short-term financing is _____.

Accepted Answer

A)   bank loans
B)   trade credit
C)   sale of bonds
D)   sale of stock
E)   loans from insurance companies

Exam 16: Mastering Financial Management

Jacobson Landscaping receives an invoice from one of its suppliers.The amount of the invoice is $30,000 with terms of 2/10, net/30.If the invoice is paid on the fifth day, Jacobson is entitled to a cash discount and will write the check for .

Correct Answer
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B

Sanchez Company sells its garden hoses to Gary's Lawn and Garden Center but does not require Gary's to pay for them right away.If this is a standard trade-credit agreement, Gary's will have to pay for the garden hoses in

Correct Answer
verified

Debbie Brooks purchased a $1,000 corporate bond that pays 9 percent interest.The face value of her bond is $1,000.What is the amount of interest that she will receive each year?

Correct Answer
verified

The usual repayment period for long-term loans is

Correct Answer
verified

Interest on corporate bonds is paid quarterly.

Correct Answer
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Debt capital is borrowed money that does not have to be repaid.

Correct Answer
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The steps in effective financial planning are

Correct Answer
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In a revolving credit agreement, the borrower typically pays on the portion of the revolving credit agreement.

Correct Answer
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Long-term loans and the sale of corporate bonds are common sources of equity financing.

Correct Answer
verified

Trade credit is the most popular form of short-term financing available for most businesses.

Correct Answer
verified

Sara Lee Corporation is a large conglomerate of businesses participating in a variety of industries.Sara Lee is considering the purchase of Bryan Foods.If Bryan Foods represents a tremendous opportunity to make the company more successful, Sara Lee may as a last resort

Correct Answer
verified

Correct Answer
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Business firms usually have more difficulty obtaining short-term financing than long-term financing.

Correct Answer
verified

Most financial managers consider long-term financing to be money that will be used for longer than one year.

Correct Answer
verified

Although a corporation does not have to pay dividends on common stock, it is required to pay dividends on preferred stock.

Correct Answer
verified

Describe the characteristics and traits required for a successful career in financial management.

During 2009, Bedford Technology sold common stock for the first time to whoever wanted to buy it.This was the ____ of Bedford.

Correct Answer
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C

Correct Answer
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With regard to ongoing expenses, the most expensive type of long-term financing is the sale of common stock.

Correct Answer
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The most popular form of short-term financing is _____.

Correct Answer
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Exam 16: Mastering Financial Management

Jacobson Landscaping receives an invoice from one of its suppliers.The amount of the invoice is $30,000 with terms of 2/10, net/30.If the invoice is paid on the fifth day, Jacobson is entitled to a ____ cash discount and will write the check for ____.

Correct AnswerverifiedB

Sanchez Company sells its garden hoses to Gary's Lawn and Garden Center but does not require Gary's to pay for them right away.If this is a standard trade-credit agreement, Gary's will have to pay for the garden hoses in

Correct AnswerverifiedShow Answer

Debbie Brooks purchased a $1,000 corporate bond that pays 9 percent interest.The face value of her bond is $1,000.What is the amount of interest that she will receive each year?

Correct AnswerverifiedShow Answer

The usual repayment period for long-term loans is

Correct AnswerverifiedShow Answer

Interest on corporate bonds is paid quarterly.

Correct AnswerverifiedShow Answer

Debt capital is borrowed money that does not have to be repaid.

Correct AnswerverifiedShow Answer

The steps in effective financial planning are

Correct AnswerverifiedShow Answer

In a revolving credit agreement, the borrower typically pays ____ on the ____ portion of the revolving credit agreement.

Correct AnswerverifiedShow Answer

Long-term loans and the sale of corporate bonds are common sources of equity financing.

Correct AnswerverifiedShow Answer

Trade credit is the most popular form of short-term financing available for most businesses.

Correct AnswerverifiedShow Answer

Sara Lee Corporation is a large conglomerate of businesses participating in a variety of industries.Sara Lee is considering the purchase of Bryan Foods.If Bryan Foods represents a tremendous opportunity to make the company more successful, Sara Lee may as a last resort

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Business firms usually have more difficulty obtaining short-term financing than long-term financing.

Correct AnswerverifiedShow Answer

Most financial managers consider long-term financing to be money that will be used for longer than one year.

Correct AnswerverifiedShow Answer

Although a corporation does not have to pay dividends on common stock, it is required to pay dividends on preferred stock.

Correct AnswerverifiedShow Answer

Describe the characteristics and traits required for a successful career in financial management.

During 2009, Bedford Technology sold common stock for the first time to whoever wanted to buy it.This was the ____ of Bedford.

Correct AnswerverifiedC

Correct AnswerverifiedShow Answer

With regard to ongoing expenses, the most expensive type of long-term financing is the sale of common stock.

Correct AnswerverifiedShow Answer

The most popular form of short-term financing is _____.

Correct AnswerverifiedShow Answer

Jacobson Landscaping receives an invoice from one of its suppliers.The amount of the invoice is $30,000 with terms of 2/10, net/30.If the invoice is paid on the fifth day, Jacobson is entitled to a cash discount and will write the check for .

Correct Answer
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B

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In a revolving credit agreement, the borrower typically pays on the portion of the revolving credit agreement.

Correct Answer
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C

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