Question 1

All of the activities concerned with obtaining money and using it effectively are called

Accepted Answer

A)  financial management.
B)  long-term financing.
C)  budgeting.
D)  financial planning.
E)  unsecured financing.F) B) and C)
G) A) and E)

Question 2

​GHJ Inc. will use ___ by borrowing funds to increase the return on the owners' equity.

Accepted Answer

A)  ​financial leverage
B)  ​lines of credit
C)  ​common stock
D)  ​trade creditE) B) and C)
F) A) and D)

Question 3

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.F) A) and D)
G) B) and C)

Question 4

During the recent economic crisis, the number of business bankruptcies actually declined.

Accepted Answer

A) True 
 B)False

Question 5

In a revolving credit agreement, the borrower typically pays ____ of the ____ portion of the 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; unusedF) B) and C)
G) D) and E)

Question 6

Interest on corporate bonds is paid quarterly.

Accepted Answer

A) True 
 B)False

Question 7

Financial managers should

Accepted Answer

A)  ignore minor budgeting problems and concentrate on major problems when budgeting.
B)  establish a means of monitoring financial performance on an interim basis.
C)  prepare budgets and hope for the best.
D)  hire a person to go over interim budgets.
E)  fire or demote individual managers when budgeting goals are not achieved.F) B) and E)
G) C) and D)

Question 8

A statement that projects income and/or expenditures over a specified future period is called a

Accepted Answer

A)  financial plan.
B)  cash flow plan.
C)  resources plan.
D)  resource allocation statement.
E)  budget.F) A) and C)
G) B) and D)

Question 9

A loan that is approved before the money is actually needed is called a

Accepted Answer

A)  certificate of deposit.
B)  check.
C)  credit bounce.
D)  line of credit.
E)  promissory note.F) B) and E)
G) A) and E)

Question 10

Commercial paper short-term financing is usually available only to large firms.

Accepted Answer

A) True 
 B)False

Question 11

When a corporation uses an initial public offering to raise capital, the stock is sold in the

Accepted Answer

A)  primary market.
B)  secondary market.
C)  unsecured financing market.
D)  securities exchange.
E)  over-the-counter market.F) None of the above
G) B) and E)

Question 12

Financial leverage is the use of borrowed funds to increase the return on owners' equity.

Accepted Answer

A) True 
 B)False

Question 13

The assets most commonly used as collateral for short-term financing include

Accepted Answer

A)  cash and accounts receivable.
B)  accounts payable and notes payable.
C)  inventory and equipment.
D)  marketable securities and owners' equity.
E)  accounts receivable and inventory.F) B) and E)
G) A) and D)

Question 14

The quality of a firm's accounts receivables is the credit standing of the firm's customers, coupled with the customers' ability to repay their credit obligations.

Accepted Answer

A) True 
 B)False

Question 15

Zero-base budgeting is a budgeting approach in which every expense must be justified in every budget.

Accepted Answer

A) True 
 B)False

Question 16

Bonds from a single issue that have staggered maturity dates are called serial bonds.

Accepted Answer

A) True 
 B)False

Exam 16: Mastering Financial Management

Interest on corporate bonds is paid quarterly.

Correct Answer
verified

During the recent economic crisis, the number of business bankruptcies actually declined.

Correct Answer
verified

The assets most commonly used as collateral for short-term financing include

Correct Answer
verified

Zero-base budgeting is a budgeting approach in which every expense must be justified in every budget.

Correct Answer
verified

A statement that projects income and/or expenditures over a specified future period is called a

Correct Answer
verified

GHJ Inc. will use ___ by borrowing funds to increase the return on the owners' equity.

Correct Answer
verified

All of the activities concerned with obtaining money and using it effectively are called

Correct Answer
verified

Commercial paper short-term financing is usually available only to large firms.

Correct Answer
verified

The quality of a firm's accounts receivables is the credit standing of the firm's customers, coupled with the customers' ability to repay their credit obligations.

Correct Answer
verified

Bonds from a single issue that have staggered maturity dates are called serial bonds.

Correct Answer
verified

The most popular form of short-term financing is

Correct Answer
verified

A loan that is approved before the money is actually needed is called a

Correct Answer
verified

Financial leverage is the use of borrowed funds to increase the return on owners' equity.

Correct Answer
verified

When a corporation uses an initial public offering to raise capital, the stock is sold in the

Correct Answer
verified

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

Correct Answer
verified

Financial managers should

Correct Answer
verified

Exam 16: Mastering Financial Management

Interest on corporate bonds is paid quarterly.

Correct AnswerverifiedShow Answer

During the recent economic crisis, the number of business bankruptcies actually declined.

Correct AnswerverifiedShow Answer

The assets most commonly used as collateral for short-term financing include

Correct AnswerverifiedShow Answer

Zero-base budgeting is a budgeting approach in which every expense must be justified in every budget.

Correct AnswerverifiedShow Answer

A statement that projects income and/or expenditures over a specified future period is called a

Correct AnswerverifiedShow Answer

​GHJ Inc. will use ___ by borrowing funds to increase the return on the owners' equity.

Correct AnswerverifiedShow Answer

All of the activities concerned with obtaining money and using it effectively are called

Correct AnswerverifiedShow Answer

Commercial paper short-term financing is usually available only to large firms.

Correct AnswerverifiedShow Answer

The quality of a firm's accounts receivables is the credit standing of the firm's customers, coupled with the customers' ability to repay their credit obligations.

Correct AnswerverifiedShow Answer

Bonds from a single issue that have staggered maturity dates are called serial bonds.

Correct AnswerverifiedShow Answer

The most popular form of short-term financing is

Correct AnswerverifiedShow Answer

A loan that is approved before the money is actually needed is called a

Correct AnswerverifiedShow Answer

Financial leverage is the use of borrowed funds to increase the return on owners' equity.

Correct AnswerverifiedShow Answer

When a corporation uses an initial public offering to raise capital, the stock is sold in the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Financial managers should

Correct AnswerverifiedShow Answer

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GHJ Inc. will use ___ by borrowing funds to increase the return on the owners' equity.

Correct Answer
verified

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified