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Exam 18: Financial Management

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Question 21

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Financial managers are responsible for controlling cash flows.

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Question 22

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Green Builder's Supply,Inc.does not offer customers a cash discount for early payment of their accounts receivable.As a result,most customers wait to pay their bill on the last day before late penalties are charged.These customers apparently understand the:

A) time value of money.
B) benefits of tax-deductible expenses.
C) financial community's perception of equity financing.
D) government's regulations of the chemical industry.

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Question 23

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Suppliers of short-term financing are prohibited from requiring collateral for the funds they lend to small businesses.

Which of the following presents an effective technique to improve cash management?

Which of the following is a primary area of concern for financial managers?

Which of the following would normally involve long-term financing?

Big Bear Ski Lodge's cash budget for the month of March,2011,shows a negative amount.Due to the fact that the months of January and February were quite lucrative and showed positive amounts,the finance manager will not borrow any money on the short-term to cover for March's deficit.

Financial managers at Sasha Deal Electronics have always had a conservative attitude toward long-term financing.In particular,they are interested in keeping risk to a minimum.This philosophy suggests that managers at Sasha Deal consider the extensive use of leverage an attractive financial strategy.

When using ________ financing,the company incurs a legal obligation to repay the amount borrowed.

Tax management by financial managers involves the development of strategies to evade tax liabilities.

The cost of capital is the rate of return a firm must earn in order to meet the demands of its lenders and expectations of its equity holders.

Identify and describe the major steps involved in financial planning.

The interest paid on ________ represents a tax-deductible business expense.

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

Acquiring and storing inventory represents a sizable expenditure for many businesses.

The finance manager at Preferred Pet Care Inc has asked the company's accountant to prepare a report that shows the amount the firm is spending monthly on veterinary supplies for its western suburb service area,in the hopes of negotiating better payment terms with its suppliers.The purpose of this effort is to increase cash levels within the firm.

According to an article on STLToday.com,"Anheuser Busch-InBev's tougher line toward suppliers has drawn fire.The U.S.division is losing some suppliers who can't adjust to the company's new policy of taking as long as 120 days to pay bills.Before the InBev takeover,Anheuser-Busch paid many of its accounts in 30 days." This news refers to the brewer's __________ policies.

A promissory note that requires the borrower to repay the loan in specified installments is called a(n) :

Which of the following commonly results in the financial failure of a firm?

If a buyer is offered the terms of sale of "3/10,net 30" this means that the buyer can receive a 10 percent discount by making full payment within 30 days of the billing date.