Question 1

Explain what can be indicated by the growing importance of financial professionals.

Accepted Answer

The growing importance of financial prof...

Question 2

What is the purpose of a financial plan?

Accepted Answer

A financial plan is a document that spec...

Question 3

Firms often rely on short-term sources of funds to pay for large,permanent assets such as machinery and buildings.

Accepted Answer

A) True 
 B)False

Question 4

Public sales can vary substantially from year to year depending on the conditions in the financial markets.

Accepted Answer

A) True 
 B)False

Question 5

The senior financial manager has the title of ________.

Accepted Answer

A)  chief financial officer
B)  chief operations officer
C)  treasurer
D)  controllerE) None of the above
F) A) and B)

Question 6

In many companies,a CEO is promoted to the position of CFO.

Accepted Answer

A) True 
 B)False  False

Question 7

MATCHING
Complete the following using the terms listed.
-A(n) _____ is a sale of assets by a company.

Accepted Answer

A)  asset intensity
B)  private placements
C)  factoring
D)  capital investment analysis
E)  debt capitalF) equity capitalG) financial planH) leveraged buyoutI) private equity fundsJ) divestureK) marketable securitiesL) financial managerM) bondsN) trade creditO) leverageP) capital structureQ) B) and L)
R) I) and K)

Question 8

Increasing leverage decreases management's flexibility in future financing decisions.

Accepted Answer

A) True 
 B)False

Question 9

Chemical manufacturer DuPont has approximately $0.68 in assets for every dollar in sales.According to asset intensity,for every $100 increase in sales,the firm would need about $100 of additional assets.

Accepted Answer

A) True 
 B)False  False

Question 10

The process that periodically checks actual revenues and expenses against forecast values is ________.

Accepted Answer

A)  strategic planning
B)  financial planning
C)  budgeting
D)  financial controlE) A) and C)
F) C) and D)

Question 11

Financial managers are responsible for increasing profits to shareholders.

Accepted Answer

A) True 
 B)False

Question 12

MATCHING
Complete the following using the terms listed.
-_____ consists of funds provided by the firm's owners when they reinvest earnings,make additional contributions,liquidate assets,issue stock,or raise capital.

Accepted Answer

A)  asset intensity
B)  private placements
C)  factoring
D)  capital investment analysis
E)  debt capitalF) equity capitalG) financial planH) leveraged buyoutI) private equity fundsJ) divestureK) marketable securitiesL) financial managerM) bondsN) trade creditO) leverageP) capital structureQ) A) and E)
R) F) and G)

Question 13

All of the following actions result in equity capital EXCEPT ________.

Accepted Answer

A)  issuing bonds
B)  liquidating assets
C)  issuing stock
D)  reinvesting earningsE) A) and B)
F) B) and D)

Question 14

MATCHING
Complete the following using the terms listed.
-A transaction in which public shareholders are bought out and the firm reverts to private status is known as a(n) _____.

Accepted Answer

A)  asset intensity
B)  private placements
C)  factoring
D)  capital investment analysis
E)  debt capitalF) equity capitalG) financial planH) leveraged buyoutI) private equity fundsJ) divestureK) marketable securitiesL) financial managerM) bondsN) trade creditO) leverageP) capital structureQ) N) and O)
R) A) and F)

Question 15

MATCHING
Complete the following using the terms listed.
-Certificates of indebtedness sold to raise long-term funds for a corporation or government agency are known as _____.

Accepted Answer

A)  asset intensity
B)  private placements
C)  factoring
D)  capital investment analysis
E)  debt capitalF) equity capitalG) financial planH) leveraged buyoutI) private equity fundsJ) divestureK) marketable securitiesL) financial managerM) bondsN) trade creditO) leverageP) capital structureQ) E) and M)
R) M) and P)

Question 16

Acquisitions are the opposite of mergers,in which companies sell assets such as subsidiaries,product lines,or production facilities.

Accepted Answer

A) True 
 B)False

Question 17

Central Valley Pharmaceuticals needs to raise funds to buy new production equipment.The financial manager would probably suggest that his company raise debt capital by ________.

Accepted Answer

A)  using accumulated earnings
B)  selling stock
C)  selling marketable securities
D)  borrowing money from a bankE) All of the above
F) C) and D)

Question 18

A balance sheet hedge provides a method for global companies to reduce risks associated with exchange rate fluctuations.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following assets would a firm most likely finance using long-term sources?

Accepted Answer

A)  inventory
B)  accounts receivable
C)  marketable securities
D)  another companyE) B) and C)
F) A) and C) D

Question 20

A company's financial plan should answer all of the following questions EXCEPT ________.

Accepted Answer

A)  What is the contingency plan in case of bankruptcy?
B)  What funds will the firm require during the appropriate period of operations?
C)  How will it obtain the necessary money?
D)  When will it need more cash?E) B) and C)
F) C) and D)

Exam 17: Financial Management

Explain what can be indicated by the growing importance of financial professionals.

Correct AnswerverifiedThe growing importance of financial prof...View AnswerShow Answer

What is the purpose of a financial plan?

Correct AnswerverifiedA financial plan is a document that spec...View AnswerShow Answer

Firms often rely on short-term sources of funds to pay for large,permanent assets such as machinery and buildings.

Correct AnswerverifiedShow Answer

Public sales can vary substantially from year to year depending on the conditions in the financial markets.

Correct AnswerverifiedShow Answer

The senior financial manager has the title of ________.

Correct AnswerverifiedShow Answer

In many companies,a CEO is promoted to the position of CFO.

Correct AnswerverifiedFalse

MATCHING Complete the following using the terms listed. -A(n) _____ is a sale of assets by a company.

Correct AnswerverifiedShow Answer

Increasing leverage decreases management's flexibility in future financing decisions.

Correct AnswerverifiedShow Answer

Chemical manufacturer DuPont has approximately $0.68 in assets for every dollar in sales.According to asset intensity,for every $100 increase in sales,the firm would need about $100 of additional assets.

Correct AnswerverifiedFalse

The process that periodically checks actual revenues and expenses against forecast values is ________.

Correct AnswerverifiedShow Answer

Financial managers are responsible for increasing profits to shareholders.

Correct AnswerverifiedShow Answer

MATCHING Complete the following using the terms listed. -_____ consists of funds provided by the firm's owners when they reinvest earnings,make additional contributions,liquidate assets,issue stock,or raise capital.

Correct AnswerverifiedShow Answer

All of the following actions result in equity capital EXCEPT ________.

Correct AnswerverifiedShow Answer

MATCHING Complete the following using the terms listed. -A transaction in which public shareholders are bought out and the firm reverts to private status is known as a(n) _____.

Correct AnswerverifiedShow Answer

MATCHING Complete the following using the terms listed. -Certificates of indebtedness sold to raise long-term funds for a corporation or government agency are known as _____.

Correct AnswerverifiedShow Answer

Acquisitions are the opposite of mergers,in which companies sell assets such as subsidiaries,product lines,or production facilities.

Correct AnswerverifiedShow Answer

Central Valley Pharmaceuticals needs to raise funds to buy new production equipment.The financial manager would probably suggest that his company raise debt capital by ________.

Correct AnswerverifiedShow Answer

A balance sheet hedge provides a method for global companies to reduce risks associated with exchange rate fluctuations.

Correct AnswerverifiedShow Answer

Which of the following assets would a firm most likely finance using long-term sources?

Correct AnswerverifiedD

A company's financial plan should answer all of the following questions EXCEPT ________.

Correct AnswerverifiedShow Answer

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The growing importance of financial prof...
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A financial plan is a document that spec...
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False

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False

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D

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