Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The highest cost of short-term finance generally is

Accepted Answer

A)   trade credit.
B)   unsecured bank loans.
C)   commercial paper.
D)   factoring.
E)   promissory notes.F) A) and B)
G) A) and C)

Question 3

Charlie develops a plan for obtaining and using the money necessary for his company to implement its goals.This is called a(n)

Accepted Answer

A)   credit policy.
B)   capital budget.
C)   operational plan.
D)   financing agreement.
E)   financial plan.F) B) and E)
G) A) and E)

Question 4

Each year Picoso,Inc.,follows a budgeting process.The first step is always to look at the previous year's budget and see if anything needs to be updated.Picoso uses ____ budgeting.

Accepted Answer

A)   cash
B)   traditional
C)   capital
D)   zero-base
E)   historicalF) B) and E)
G) C) and E)

Question 5

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) A) and B)
G) A) and C)

Question 6

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) A) and E)
G) C) and D)

Question 7

The lowest interest rate charged by a bank for a short-term loan is called the discount rate.

Accepted Answer

A) True 
 B)False

Question 8

A POS terminal is a computerized cash register located in a retail store and connected to a bank's computer.

Accepted Answer

A) True 
 B)False

Question 9

The amounts owed to a firm by its customers are called

Accepted Answer

A)   factors.
B)   revolving credit agreements.
C)   dividends.
D)   accounts receivable.
E)   commercial drafts.F) A) and E)
G) A) and C)

Question 10

Corporate profits reinvested in the business are called retained earnings.

Accepted Answer

A) True 
 B)False

Question 11

What is a budget? How is it used by a business firm?

Accepted Answer

A budget is a financial statement that p...

Question 12

​A corporation that does not distribute all of its profit to stockholders has ___.

Accepted Answer

A)   ​retained earnings
B)   ​unpaid dividends
C)   ​cash on hand
D)   ​accounts payableE) B) and C)
F) A) and B)

Question 13

​Money invested in small firms that have the potential to become very successful is called

Accepted Answer

A)   ​venture capital.
B)   ​small business loans.
C)   ​lines of credit.
D)   ​angel credit.E) A) and B)
F) A) and C)

Question 14

The interest rate and repayment terms for term loans often are based on such factors as the reasons for borrowing,the borrowing firm's credit rating,and the value of collateral.

Accepted Answer

A) True 
 B)False

Question 15

Equity capital generally provides the greatest part of a firm's financing.

Accepted Answer

A) True 
 B)False

Question 16

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 17

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 18

Harry receives an invoice from one of its European suppliers for antiques.The amount of the invoice is $40,000 with terms of 3/10,net/60.If the invoice is paid on day 20,Beard is entitled to a ____ cash discount and will write the check for ____.

Accepted Answer

A)   $1,200;$1,200
B)   $1,200;$38,800
C)   $0;$40,000
D)   $0;$41,200
E)   $0;$1,200F) A) and E)
G) None of the above

Question 19

Which of the following firms is most likely to receive venture capital?

Accepted Answer

A)   Virtual reality Internet company
B)   Laundromat
C)   Local fast-food restaurant
D)   Book retailer
E)   Convenience storeF) D) and E)
G) A) and B)

Question 20

Downing,Inc.,issues bonds to purchase new machinery for its factories.These bonds are secured by the machinery purchased with the proceeds of the bond issue.These are ____ bonds.

Accepted Answer

A)   debenture
B)   mortgage
C)   convertible
D)   indenture
E)   sinking fundF) B) and E)
G) A) and E)

Exam 16: Mastering Financial Management

​A corporation that does not distribute all of its profit to stockholders has ___.

Correct AnswerverifiedShow Answer

Downing,Inc.,issues bonds to purchase new machinery for its factories.These bonds are secured by the machinery purchased with the proceeds of the bond issue.These are ____ bonds.

Correct AnswerverifiedShow Answer

Equity capital generally provides the greatest part of a firm's financing.

Correct AnswerverifiedShow Answer

Harry receives an invoice from one of its European suppliers for antiques.The amount of the invoice is $40,000 with terms of 3/10,net/60.If the invoice is paid on day 20,Beard is entitled to a ____ cash discount and will write the check for ____.

Correct AnswerverifiedShow Answer

The highest cost of short-term finance generally is

Correct AnswerverifiedShow Answer

​Money invested in small firms that have the potential to become very successful is called

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following firms is most likely to receive venture capital?

Correct AnswerverifiedShow Answer

The interest rate and repayment terms for term loans often are based on such factors as the reasons for borrowing,the borrowing firm's credit rating,and the value of collateral.

Correct AnswerverifiedShow Answer

A POS terminal is a computerized cash register located in a retail store and connected to a bank's computer.

Correct AnswerverifiedShow Answer

The amounts owed to a firm by its customers are called

Correct AnswerverifiedShow Answer

Each year Picoso,Inc.,follows a budgeting process.The first step is always to look at the previous year's budget and see if anything needs to be updated.Picoso uses ____ budgeting.

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

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

Correct AnswerverifiedShow Answer

Charlie develops a plan for obtaining and using the money necessary for his company to implement its goals.This is called a(n)

Correct AnswerverifiedShow Answer

The lowest interest rate charged by a bank for a short-term loan is called the discount rate.

Correct AnswerverifiedShow Answer

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

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

Corporate profits reinvested in the business are called retained earnings.

Correct AnswerverifiedShow Answer

What is a budget? How is it used by a business firm?

Correct AnswerverifiedA budget is a financial statement that p...View AnswerShow Answer

A corporation that does not distribute all of its profit to stockholders has ___.

Correct Answer
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Harry receives an invoice from one of its European suppliers for antiques.The amount of the invoice is $40,000 with terms of 3/10,net/60.If the invoice is paid on day 20,Beard is entitled to a cash discount and will write the check for .

Correct Answer
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Correct Answer
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Money invested in small firms that have the potential to become very successful is called

Correct Answer
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Correct Answer
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Correct Answer
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A budget is a financial statement that p...
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