Exam 18: Financial Management

RS Bank provides short-term loans to small businesses.Many of the bank's customers take months to pay their bills.The bank often buys the companies' accounts receivable and pays them in return.This is an example of ________.

Which of the following is a disadvantage of long-term loans?

________ budget identifies the money a new company will need to spend to launch operations.

A company keeps $150,000 cash reserve to meet day-to-day expenses.The cash reserve is centralized and various branches can access money from the reserve to meet every-day expenses.This cash reserve is part of the company's ________ account.

Explain the concept of venture capital.

Choose an operational unit of your unit (for example,the marketing department in a firm)and construct an operating budget for the unit.Make necessary assumptions and list all the assumptions that you are making.

Dulbor is a manufacturer of automobile tires.The company requires such raw materials as natural rubber,activators,and other chemicals.Total fund available to the company in the current financial year is $500,000.Construct a financial plan for Dulbor.Make the necessary assumptions.

When using ________,a company starts the year with a budget based on revenue and cost assumptions made at that point but then reviews economic performance every month or every quarter to see whether the budget needs to be modified as the year progresses.

Roder Industries is a multinational production firm.Invo Bank is the firm's major financier in the United States.The bank offers short-term loans to Roder at a very low rate and the bank considers Roder to be its best customer.The interest rate the Invo bank charges on these short-term loans are called ________ interest rate.

Debentures are backed by specific assets that will be given to bondholders if the borrowed amount is not repaid.

Preparing a public offering involves ________.

Which of the following is a component of a firm's working capital account?

Explain why businesses use factoring to raise funds.

________ budget identifies the costs needed to accomplish a particular assignment.

Which of the following is a major advantage of raising funds through selling shares of ownership?

Inventory represents a cost while it is waiting to be sold.

A company sells its accounts receivable to an intermediary.The intermediary collects the receivables from the customer.This is an example of ________.

________ budget is a budget that outlines expenditures for real estate,new facilities,major equipment,and other such investments.

Gordon Consultants is planning to raise money by leasing a building that it owns.What do you think are the components of a lease agreement? Draft a lease agreement for Gordon Consultants.

Forter Consultants is a firm that provides cloud computing and remote storage services to firms in the United States.The company plans to buy more servers to increase its operating and storing capacity.It also creates a budget for the purchase and it estimates the total cost to be about $3 million.The budget created for this transaction is an example of a(n)________ budget.