Exam 1: The Role of Managerial Finance

Which of the following activities of a finance manager determines how the firm raises money to pay for the assets in which it invests?

A financial analyst is responsible for maintaining and controlling a firm's daily cash balances.

An ethics program is expected to have ________ impact on a firm's share price.

Which of the following is true of accrual basis accounting?

A ________ is responsible for a firm's financial activities such as financial planning and fund raising, making capital expenditure decisions, and managing cash, credit, the pension fund, and foreign exchange.

When considering a firm's financial decision alternative, financial managers should accept only those actions that are expected to maximize shareholder value.

Stockholders expect to earn higher rates of return on investments with lower risk and lower rates of return on investments with higher risk.

Cash flows and risk are the key determinants in share price. Increased risk, other things remaining the same, results in ________.

Incentive plans usually tie management compensation to ________.

The primary activity of a financial manager is ________.

The conflict between the goals of a firm's owners and the goals of its non-owner managers is ________.

Using certain standardized and generally accepted principles, an accountant prepares financial statements that recognize revenue at the point of sale and expenses when incurred.

Which of the following legal forms of organization is most expensive to organize?

An agency problem occurs when a firm selects an ineffective marketing, advertising, and PR firm to represent them.

A treasurer is commonly responsible for handling ________.

Economic theories that a financial manager must ensure for efficient business operations, include ________.

________ is concerned with design and delivery of advice and financial products to individuals, businesses, and governments.

The treasurer typically manages a firm's cash, investing surplus funds when available and securing outside financing when needed.

Which of the following is true of cash flows and risk?

A corporate treasurer's focus tends to be more external, while the controller's focus is more internal.