Question 1

What is cash flow? Why is cash flow important to a business?

Accepted Answer

Cash flow refers to the movement of mone...

Question 2

An initial public offering occurs anytime that a corporation sells stock to the general public.

Accepted Answer

A) True 
 B)False

Question 3

Kirsten purchased a new dining room table and china cabinet from Discount Furniture, which offered a one-year special with no interest or financing charges. When Kirsten makes her purchase, Discount Furniture checks her credit and seeks approval for her. Upon approval, Kirsten is informed her that she will make payments to Regional Finance Company. This arrangement is an example of

Accepted Answer

A)   unsecured bank loan.
B)   commercial paper.
C)   factoring.
D)   pledging accounts receivable.
E)   selective financing.F) A) and C)
G) A) and D)

Question 4

A cash budget estimates a firm's expenditures for major assets like replacement of obsolete equipment and mergers and acquisitions.

Accepted Answer

A) True 
 B)False

Question 5

Compare the traditional approach to budgeting with the zero-base budgeting approach.

Accepted Answer

The traditional approach to budgeting in...

Question 6

Max Beauty Supply has ordered $5,000 worth of merchandise from Kelly's Beauty Supply, Inc. The invoice to Max has discount terms of 2/10, net/30. Max writes a check within ten days for

Accepted Answer

A)   $100.
B)   $1,000.
C)   $4,000.
D)   $4,900.
E)   $5,000.F) A) and D)
G) All of the above

Question 7

A factor will buy accounts receivable for

Accepted Answer

A)   more than their face value.
B)   less than their face value.
C)   their present value.
D)   their par value.
E)   the interest that can be collected from them.F) B) and D)
G) D) and E)

Question 8

Short-term financing not backed by collateral is called

Accepted Answer

A)   debt capital.
B)   unsecured financing.
C)   mortgage bonds.
D)   trade credit.
E)   unprotected financing.F) All of the above
G) None of the above

Question 9

Chelsea notices that her preferred stock from Landings, Inc., has a par value of $40. She knows that this $40

Accepted Answer

A)   represents the price she paid for the stock.
B)   represents the amount she could sell the stock for.
C)   is the amount Landings will pay her each year.
D)   is an assigned and often arbitrary number.
E)   is the redemption value of the stock.F) A) and E)
G) All of the above

Question 10

The NASDAQ, part of the ___ market, provides price information on more than 3,600 stocks.

Accepted Answer

A)   NYSE
B)   secondary
C)   primary
D)   over-the-counter
E)   securities exchangeF) B) and D)
G) A) and E)

Question 11

Bonds that are backed only by the reputation of the issuing corporation are known as

Accepted Answer

A)   mortgage bonds.
B)   registered bonds.
C)   debenture bonds.
D)   bond indentures.
E)   serial bonds.F) C) and E)
G) A) and E)

Question 12

Which of the following might be considered the most drastic step in securing funding, often a last resort for a corporation?

Accepted Answer

A)   Using sales revenue
B)   Equity capital funding
C)   Short-term borrowing from a bank
D)   Debt capital funding
E)   Sale of assetsF) A) and E)
G) A) and D)

Question 13

State the purpose of a promissory note. Describe why a supplier would use a promissory note for short-term financing instead of trade credit.

Accepted Answer

The purpose of a promissory note is to s...

Question 14

Kevin received unsecured financing from a bank for his plumbing business. This means that Kevin did not have to provide the bank with any

Accepted Answer

A)   application forms.
B)   collateral.
C)   reasons for the loan.
D)   promise to pay interest.
E)   scheduled monthly payments.F) B) and C)
G) B) and E)

Question 15

The primary sources of funds available to a business include all of the following except

Accepted Answer

A)   debt capital.
B)   sales of assets.
C)   government grants.
D)   sales revenue.
E)   equity capital.F) None of the above
G) A) and E)

Question 16

Marietta Hotels used a twenty-five-year, $50 million bond issue to finance its expansion. In its plan to ensure that funds would be available to redeem the bonds at maturity, it arranged that none of the bonds would mature during the first fifteen years. Therefore, 10 percent of the bonds mature each year until all the bonds are retired at the end of the twenty-fifth year. This is an example of the ____ method of repayment.

Accepted Answer

A)   sinking fund
B)   selling new bonds
C)   registered bond
D)   selling old bonds
E)   serial bondF) All of the above
G) None of the above

Question 17

The terms "2/10, net/30" are used with most promissory notes.

Accepted Answer

A) True 
 B)False

Question 18

Casey Broadway's responsibility at his company is overseeing all the activities concerned with obtaining money and using it effectively. Casey is a(n)

Accepted Answer

A)   accountant.
B)   financial manager.
C)   financial planner.
D)   investment advisor.
E)   loan officer.F) A) and B)
G) A) and C)

Question 19

For a corporation such as AT&T, what are the two primary advantages of equity financing?

Accepted Answer

A)   It never has to be paid back and flotation costs are low.
B)   There is no obligation to pay dividends or to repay the money obtained from the sale of stock.
C)   Interest payments are less than debt financing and principal does not have to be repaid.
D)   Ownership is spread among many individuals and no interest payments are required.
E)   Investors pay top dollar for stock issues and the corporation has higher ongoing expenses.F) B) and D)
G) B) and C)

Question 20

Short-term financing is used to start a new business.

Accepted Answer

A) True 
 B)False

Exam 19: Mastering Financial Management

State the purpose of a promissory note. Describe why a supplier would use a promissory note for short-term financing instead of trade credit.

Correct Answer
Answered by ExamLex AI
The purpose of a promissory note is to s...
View Answer

Max Beauty Supply has ordered $5,000 worth of merchandise from Kelly's Beauty Supply, Inc. The invoice to Max has discount terms of 2/10, net/30. Max writes a check within ten days for

Correct Answer
verified

The NASDAQ, part of the ___ market, provides price information on more than 3,600 stocks.

Correct Answer
verified

An initial public offering occurs anytime that a corporation sells stock to the general public.

Correct Answer
verified

Casey Broadway's responsibility at his company is overseeing all the activities concerned with obtaining money and using it effectively. Casey is a(n)

Correct Answer
verified

A cash budget estimates a firm's expenditures for major assets like replacement of obsolete equipment and mergers and acquisitions.

Correct Answer
verified

Short-term financing is used to start a new business.

Correct Answer
verified

Kevin received unsecured financing from a bank for his plumbing business. This means that Kevin did not have to provide the bank with any

Correct Answer
verified

Which of the following might be considered the most drastic step in securing funding, often a last resort for a corporation?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Compare the traditional approach to budgeting with the zero-base budgeting approach.

Correct Answer
Answered by ExamLex AI
The traditional approach to budgeting in...
View Answer

A factor will buy accounts receivable for

Correct Answer
verified

Bonds that are backed only by the reputation of the issuing corporation are known as

Correct Answer
verified

What is cash flow? Why is cash flow important to a business?

Correct Answer
Answered by ExamLex AI
Cash flow refers to the movement of mone...
View Answer

For a corporation such as AT&T, what are the two primary advantages of equity financing?

Correct Answer
verified

Short-term financing not backed by collateral is called

Correct Answer
verified

The terms "2/10, net/30" are used with most promissory notes.

Correct Answer
verified

Chelsea notices that her preferred stock from Landings, Inc., has a par value of $40. She knows that this $40

Correct Answer
verified

The primary sources of funds available to a business include all of the following except

Correct Answer
verified

Exam 19: Mastering Financial Management

State the purpose of a promissory note. Describe why a supplier would use a promissory note for short-term financing instead of trade credit.

Correct AnswerAnswered by ExamLex AIThe purpose of a promissory note is to s...View AnswerShow Answer

Max Beauty Supply has ordered $5,000 worth of merchandise from Kelly's Beauty Supply, Inc. The invoice to Max has discount terms of 2/10, net/30. Max writes a check within ten days for

Correct AnswerverifiedShow Answer

The NASDAQ, part of the ___ market, provides price information on more than 3,600 stocks.

Correct AnswerverifiedShow Answer

An initial public offering occurs anytime that a corporation sells stock to the general public.

Correct AnswerverifiedShow Answer

Casey Broadway's responsibility at his company is overseeing all the activities concerned with obtaining money and using it effectively. Casey is a(n)

Correct AnswerverifiedShow Answer

A cash budget estimates a firm's expenditures for major assets like replacement of obsolete equipment and mergers and acquisitions.

Correct AnswerverifiedShow Answer

Short-term financing is used to start a new business.

Correct AnswerverifiedShow Answer

Kevin received unsecured financing from a bank for his plumbing business. This means that Kevin did not have to provide the bank with any

Correct AnswerverifiedShow Answer

Which of the following might be considered the most drastic step in securing funding, often a last resort for a corporation?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Compare the traditional approach to budgeting with the zero-base budgeting approach.

Correct AnswerAnswered by ExamLex AIThe traditional approach to budgeting in...View AnswerShow Answer

A factor will buy accounts receivable for

Correct AnswerverifiedShow Answer

Bonds that are backed only by the reputation of the issuing corporation are known as

Correct AnswerverifiedShow Answer

What is cash flow? Why is cash flow important to a business?

Correct AnswerAnswered by ExamLex AICash flow refers to the movement of mone...View AnswerShow Answer

For a corporation such as AT&T, what are the two primary advantages of equity financing?

Correct AnswerverifiedShow Answer

Short-term financing not backed by collateral is called

Correct AnswerverifiedShow Answer

The terms "2/10, net/30" are used with most promissory notes.

Correct AnswerverifiedShow Answer

Chelsea notices that her preferred stock from Landings, Inc., has a par value of $40. She knows that this $40

Correct AnswerverifiedShow Answer

The primary sources of funds available to a business include all of the following except

Correct AnswerverifiedShow Answer

Correct Answer
Answered by ExamLex AI
The purpose of a promissory note is to s...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
The traditional approach to budgeting in...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
Cash flow refers to the movement of mone...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified