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Exam 18: Financial Management

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Question 71

Multiple Choice

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,nations such as Saudi Arabia have a repository where they keep excess money for future investment.Internationally,this is known as a(n) ________________.

A) Armed holding tank
B) Access depository
C) Sovereign wealth fund
D) Bank bridge allowance

E) A) and C)
F) B) and C)

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Question 72

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Acquiring funds through debt financing actually decreases the overall risk of the firm.

A) True
B) False

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Question 73

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A bond represents a long-term debt obligation of a corporation or government.

A budget's primary purpose is to provide managers with a financial summary of past operations.

Tax payments are important to the finance manager because they represent a cash inflow to a firm.

Rod was required to pledge his house and car as collateral for a loan he received from the First National Bank.The money from the loan was used to start his new business,which unfortunately failed within 6 months.The bank can now claim Rod's house and car to satisfy its claim.

Which of these is a common source of long-term financing for a corporation?

Which of the following provides the buyer with collateral?

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

A _________ forecast predicts the future cash inflows and outflows in future periods.

Financial managers generally oppose credit sales because of the impact on cash flows.

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

The interest paid for debt financing is a tax-deductible expense for the firm.

Through equity financing,stockholders become _________ of the firm.

A promissory note is a written contract between a supplier and a business customer,with a promise that customer will pay supplier a specified amount by a certain date.

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

An operating budget analyzes the firm's spending plans for long-lasting assets that require large sums of money.

Since short-term financial forecasts predict expected future events,they should not be influenced by recent financial statements.

Selling accounts receivable to obtain short-term funds is called:

The timing of a short-term forecast is more important than the forecast's accuracy.