Question 1

The board of directors of a corporation usually is elected by

Accepted Answer

A)   bondholders.
B)   preferred stockholders.
C)   the corporation's board of directors.
D)   convertible preferred stockholders.
E)   common stockholders.F) A) and B)
G) D) and E)

Question 2

LaTisha starts a business called ValueCentral.com, the concept takes off, and the company has an IPO and goes public. The company is growing very rapidly and trying to keep up with customer demand. What type of dividend is this company likely to pay its stockholders?

Accepted Answer

A)   A large dividend due to high earnings
B)   An average size dividend
C)   Very small or no dividend
D)   All profits are to be paid as dividends.
E)   As no stock is involved, dividends are irrelevant.F) A) and B)
G) A) and C)

Question 3

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 4

All of the following are uses of long-term financing except

Accepted Answer

A)   beginning a new business.
B)   eliminating immediate cash-flow problems.
C)   executing mergers and expansions.
D)   developing and marketing new products.
E)   replacing obsolete equipment.F) All of the above
G) B) and E)

Question 5

The usual repayment period for long-term business loans is

Accepted Answer

A)   before the end of the first year.
B)   at the end of the first year.
C)   in two to three years.
D)   in three to seven years.
E)   at the end of ten years.F) D) and E)
G) All of the above

Question 6

Most financial managers agree that since the recent financial crisis, financing has become more difficult and expensive to obtain.

Accepted Answer

A) True 
 B)False

Question 7

What is speculative production and how does it impact a firm's financial planning?

Accepted Answer

Speculative production refers to the pro...

Question 8

The date on the face of a bond telling when the face value is to be repaid is called the

Accepted Answer

A)   date of issuance.
B)   maturity date.
C)   dividend declaration date.
D)   discount rate.
E)   date of record.F) All of the above
G) D) and E)

Question 9

The most basic form of ownership in a corporation is

Accepted Answer

A)   common stock.
B)   bonds.
C)   preferred stock.
D)   debentures.
E)   dividends.F) All of the above
G) C) and E)

Question 10

A feature of corporate bonds is that they

Accepted Answer

A)   pay interest until maturity.
B)   carry voting rights.
C)   represent ownership in a firm.
D)   pay dividends.
E)   have residual claims to assets after common stock.F) C) and E)
G) A) and B)

Question 11

What is the typical denomination for most corporate bonds?

Accepted Answer

A)   $100
B)   $10,000
C)   $500
D)   $1,000
E)   Ten times the par value of its stockF) D) and E)
G) C) and D)

Question 12

For a manufacturer, it is impossible to have cash-flow problems before peak sales periods.

Accepted Answer

A) True 
 B)False

Question 13

Beard Auction 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) All of the above

Question 14

All of the following would be considered appropriate collateral for a long-term loan except

Accepted Answer

A)   land.
B)   equipment.
C)   buildings.
D)   inventory.
E)   machinery.F) C) and D)
G) D) and E)

Question 15

Jones Manufacturing needs $450,000 to build a new plant. It must also spend $200,000 on new equipment for the plant. Both of these needs are examples of

Accepted Answer

A)   equity-capital needs.
B)   debt-capital needs.
C)   short-term financing needs.
D)   long-term financing needs.
E)   cash-flow problems.F) C) and E)
G) All of the above

Question 16

The ____ ratio is based on the principle that a high-risk investment should generate higher financial returns for a business and more conservative decisions often generate lesser returns.

Accepted Answer

A)   return on owners' equity
B)   risk-return
C)   earnings
D)   investment-to-equity
E)   quick returnF) A) and C)
G) B) and D)

Question 17

During the recent economic crisis, many companies found that it was

Accepted Answer

A)   accessible and easy to acquire and use many of the traditional sources of short- and long-term financing that they were accustomed to.
B)   easy to shift their methods of financing from one traditional method to another.
C)   an opportune time to acquire long-term loans and build their current inventory.
D)   increasingly difficult to acquire and use many of the traditional sources of financing that they were accustomed to.
E)   increasingly easy to sell stock for the first time to the general public.F) All of the above
G) B) and E)

Question 18

The movement of money into and out of an organization is called

Accepted Answer

A)   equity financing.
B)   a revolving credit agreement.
C)   factoring.
D)   cash flow.
E)   budgeting.F) A) and B)
G) A) and C)

Question 19

Often high-risk decisions generate larger returns while conservative decisions generate lesser returns. From a financial management standpoint does this make sense? Also, what can a financial manager do to reduce risk while increasing the firm's financial return?

Accepted Answer

From a financial management standpoint, ...

Question 20

A firm that specializes in buying other firms' accounts receivable is called a(n)

Accepted Answer

A)   factor.
B)   broker.
C)   credit officer.
D)   agent.
E)   trustee.F) D) and E)
G) B) and C)

Exam 19: Mastering Financial Management

The movement of money into and out of an organization is called

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A firm that specializes in buying other firms' accounts receivable is called a(n)

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What is the typical denomination for most corporate bonds?

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Often high-risk decisions generate larger returns while conservative decisions generate lesser returns. From a financial management standpoint does this make sense? Also, what can a financial manager do to reduce risk while increasing the firm's financial return?

Correct AnswerAnswered by ExamLex AIFrom a financial management standpoint, ...View AnswerShow Answer

LaTisha starts a business called ValueCentral.com, the concept takes off, and the company has an IPO and goes public. The company is growing very rapidly and trying to keep up with customer demand. What type of dividend is this company likely to pay its stockholders?

Correct AnswerverifiedShow Answer

What is speculative production and how does it impact a firm's financial planning?

Correct AnswerAnswered by ExamLex AISpeculative production refers to the pro...View AnswerShow Answer

For a manufacturer, it is impossible to have cash-flow problems before peak sales periods.

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The usual repayment period for long-term business loans is

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The date on the face of a bond telling when the face value is to be repaid is called the

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A feature of corporate bonds is that they

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

Jones Manufacturing needs $450,000 to build a new plant. It must also spend $200,000 on new equipment for the plant. Both of these needs are examples of

Correct AnswerverifiedShow Answer

The most basic form of ownership in a corporation is

Correct AnswerverifiedShow Answer

Beard Auction 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

All of the following would be considered appropriate collateral for a long-term loan except

Correct AnswerverifiedShow Answer

During the recent economic crisis, many companies found that it was

Correct AnswerverifiedShow Answer

Most financial managers agree that since the recent financial crisis, financing has become more difficult and expensive to obtain.

Correct AnswerverifiedShow Answer

The ____ ratio is based on the principle that a high-risk investment should generate higher financial returns for a business and more conservative decisions often generate lesser returns.

Correct AnswerverifiedShow Answer

All of the following are uses of long-term financing except

Correct AnswerverifiedShow Answer

The board of directors of a corporation usually is elected by

Correct AnswerverifiedShow Answer

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Answered by ExamLex AI
From a financial management standpoint, ...
View Answer

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Answered by ExamLex AI
Speculative production refers to the pro...
View Answer

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Beard Auction 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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