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Exam 18: Financial Management

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Question 71

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The overall objective of financial planning is to optimize the firm's profitability and make the best use of its money.

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Question 72

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Which of the following activities is most likely to be performed by a financial manager?

A) design of a marketable product that satisfies an unmet need
B) identification of specific target markets for a firm's goods
C) preparation of the balance sheet and income statement for the firm
D) analysis of the tax implications of various managerial decisions

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Question 73

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Which of the following statements about taxes is accurate?

To be effective, budgets are prepared independently of organizational forecasts.

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

By selling shares of ownership in their company, Seattle Scientific acquires the funds needed to finance their research and development projects. Seattle Scientific provides for their long-term funding needs through ________ financing.

Acquiring funds through borrowing represents

Most companies require long-term capital to purchase fixed assets such as plant and equipment, to develop new products and services, or to finance an expansion.

Inventory financing represents the selling of accounts receivables as collateral for a loan.

A line of credit from a bank guarantees a firm that a specified amount of financing will be available when it is needed.

Which of these is backed only by the reputation of the issuer?

Factoring refers to the process of selling inventory to generate short-term funds.

By identifying variances from the financial plan, managers are able to focus on those departments that require corrective action.

A(n) ________ is responsible for verifying that the accounting procedures within a firm are consistent with established accounting principles.

Which of these statements about corporate bonds is correct?

What is financial management? Identify the duties and responsibilities of financial managers.

The terms of the agreement in a bond issue are referred to as the

Financial managers examine the data prepared by accountants and make recommendations to top management regarding strategies for improving the financial performance of the company.

A line of credit is a given amount of unsecured short-term funds a bank will lend to a business.

According to the risk/return trade-off, the higher the risk, the lower the interest rate charged by the lender.