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 161

Multiple Choice

Review LaterAdd Note

Review Later

Virginia Supply offers their customers trade credit with terms 2/15 net 30.This implies that:

A) Virginia's customers have very little incentive to pay within the discount period.
B) paying within 30 days will let a customer deduct 15% off the invoice price.
C) most customers will pay their bill within 2 days in order to take the maximum discount.
D) the annual financing cost of failing to pay within 15 days is about 48%.

Correct Answer

verified

Show Answer

Question 162

Multiple Choice

Review LaterAdd Note

Review Later

If a firm sells shares of stock,it is financing with ________.

A) debt
B) liabilities
C) spectator capital
D) equity

Correct Answer

verified

Show Answer

Question 163

True/False

Review LaterAdd Note

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

By identifying variances from the financial plan,managers are able to focus on those departments that require corrective action.

Smaller firms have greater access to capital than larger firms.

The first step in financial planning is to develop a budget to better control costs.

Lancer Wholesale Company wants to improve cash flow.Which of the following strategies would be most likely to help Lancer achieve this objective?

Although best used as a last resort,many small businesses find it convenient to use __________ as a short-term source of financing.Although this form short-term debt comes with high interest rates,it provides a quick line of credit for many firms,including start-up companies who may not be able to secure bank loans.

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) ?

Equity financing must be repaid.

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 a large amount of funding - fast! The handful of seed scientists that own the company decides to offer shares of stock to general investors.This first-time offering is a(n) :

Effective managers strive to minimize their firm's cost of capital.

A(n) _____________ job includes forecasting,budgeting,cash flow analysis,cost control,taxes,and credit management.

A term-loan agreement requires the borrower to repay the loan in one lump sum at the end of the loan period.

Equity financing represents funds acquired from within the firm or through the sale of stock,representing ownership in the company.

If you are at the Phoenix Sky Harbor International Airport,you will no longer get a pat-down if you go through the metal detector.The airport now has full body screening ports that scan the entire body and readily detect weapons or explosive devices that someone may want to take on board a plane.These expensive devices represent:

Financial managers devote the majority of their time obtaining long-term financing to fund the firm's capital expenditures.

The finance manager at AllSports Communication has asked his assistant,Ben,to prepare the ________ budget.Ben will gather as much information as possible by utilizing the firm's other budgets and any documents that summarize proposed financial activities.

Carlos is the manager of Oh! Canada Sporting Goods.During the past six months,his cash expenditures have exceeded his cash receipts.Oh! Canada is suffering from a(n) ________ problem.

A tool that provides lots of convenience,credit cards are a source of a readily available line of credit for a small business because they provide convenience.