Question 1

By concentrating on cash flows within a firm, the financial manager should be able to ________.

Accepted Answer

A)  prepare tax returns 
B)  control the share price 
C)  avoid insolvency 
D)  maintain public relations 
A)  prepare tax returns 
B)  control the share price 
C)  avoid insolvency 
D)  maintain public relations

Question 2

Which of the following is a duty of a financial manager in a business firm?

Accepted Answer

A)  developing marketing plans 
B)  controlling the stock price 
C)  raising financial resources 
D)  auditing financial records 
A)  developing marketing plans 
B)  controlling the stock price 
C)  raising financial resources 
D)  auditing financial records

Question 3

________ is one of the primary responsibilities of a financial manager.

Accepted Answer

A)  Monitoring quarterly tax payments 
B)  Analyzing budget and performance reports 
C)  Determining the audit policy 
D)  Preparing income statements 
A)  Monitoring quarterly tax payments 
B)  Analyzing budget and performance reports 
C)  Determining the audit policy 
D)  Preparing income statements

Question 4

Which of the following is an area of career opportunities in financial services?

Accepted Answer

A)  supply chain management 
B)  personal financial planning 
C)  auditing of financial statements 
D)  production planning 
A)  supply chain management 
B)  personal financial planning 
C)  auditing of financial statements 
D)  production planning

Question 5

Which of the following is an example of agency costs?

Accepted Answer

A)  cost of labor 
B)  raw material cost 
C)  monitoring expenditures cost 
D)  factory rent 
A)  cost of labor 
B)  raw material cost 
C)  monitoring expenditures cost 
D)  factory rent

Question 6

Which of the following forms of organizations is the easiest to form?

Accepted Answer

A)  sole proprietorships 
B)  limited liability corporation 
C)  limited partnership 
D)  S-corporations 
A)  sole proprietorships 
B)  limited liability corporation 
C)  limited partnership 
D)  S-corporations

Question 7

The wealth of the owners of a corporation is represented by ________.

Accepted Answer

A)  profits 
B)  earnings per share 
C)  share value 
D)  cash flow 
A)  profits 
B)  earnings per share 
C)  share value 
D)  cash flow

Question 8

An accountant's primary function is ________.

Accepted Answer

A)  the evaluation of the financial statements 
B)  making decisions based on financial data 
C)  the collection and presentation of financial data 
D)  the planning of cash flows 
A)  the evaluation of the financial statements 
B)  making decisions based on financial data 
C)  the collection and presentation of financial data 
D)  the planning of cash flows

Question 9

Investment decisions generally refer to the items that appear on the ________.

Accepted Answer

A)  left-hand side of the balance sheet, and financing decisions relate to the items on the right-hand side 
B)  right-hand side of the balance sheet, and financing decisions relate to the items on the left-hand side 
C)  right-hand side of the balance sheet, and financing decisions relate to the items on the income statement 
D)  left-hand side of the balance sheet, and financing decisions relate to the items on the income statement 
A)  left-hand side of the balance sheet, and financing decisions relate to the items on the right-hand side 
B)  right-hand side of the balance sheet, and financing decisions relate to the items on the left-hand side 
C)  right-hand side of the balance sheet, and financing decisions relate to the items on the income statement 
D)  left-hand side of the balance sheet, and financing decisions relate to the items on the income statement

Question 10

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

Accepted Answer

A)  a lower share price 
B)  a higher share price 
C)  an unchanged share price 
D)  an undetermined share price 
A)  a lower share price 
B)  a higher share price 
C)  an unchanged share price 
D)  an undetermined share price

Question 11

The president or chief executive officer is elected by a firm's stockholders and has ultimate authority to guide corporate affairs and make general policy.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is one of the positive benefits of an effective ethics program?

Accepted Answer

A)  reduce potential litigation and judgment costs 
B)  maintain and build competitor confidence 
C)  gain the loyalty, commitment, and respect of the firm's competitors 
D)  making sure violations are penalized, while at the same time not subjecting the employee to publicity 
A)  reduce potential litigation and judgment costs 
B)  maintain and build competitor confidence 
C)  gain the loyalty, commitment, and respect of the firm's competitors 
D)  making sure violations are penalized, while at the same time not subjecting the employee to publicity

Question 13

A financial manager must choose between four alternative Assets: 1, 2, 3, and 4. Each asset costs $35,000 and is expected to provide earnings over a three-year period as described below.   Based on the wealth maximization goal, the financial manager would choose ________.

Accepted Answer

A)  Asset 1 
B)  Asset 2 
C)  Asset 3 
D)  Asset 4 
A)  Asset 1 
B)  Asset 2 
C)  Asset 3 
D)  Asset 4

Question 14

Institutional investors are professional investors who work on behalf of individuals, business, and government.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is an example of a firm's stakeholder?

Accepted Answer

A)  suppliers 
B)  Federal reserve 
C)  media 
D)  competitors 
A)  suppliers 
B)  Federal reserve 
C)  media 
D)  competitors

Question 16

A firm has just ended its calendar year making a sale in the amount of $200,000 of merchandise purchased during the year at a total cost of $150,500. Although the firm paid in full for the merchandise during the year, it is yet to collect at year end from the customer. The possible problem this firm may face is ________.

Accepted Answer

A)  high taxes 
B)  lack of cash flow 
C)  inability to receive credit 
D)  high leverage 
A)  high taxes 
B)  lack of cash flow 
C)  inability to receive credit 
D)  high leverage

Question 17

The key variables in the owner wealth maximization process are ________.

Accepted Answer

A)  market risk premium and risk 
B)  cash flows and risk 
C)  risk-free rate and share price 
D)  total assets and risk 
A)  market risk premium and risk 
B)  cash flows and risk 
C)  risk-free rate and share price 
D)  total assets and risk

Question 18

In large companies, CEOs are legally responsible for coordinating the assets and liabilities of the employees' pension fund.

Accepted Answer

A) True 
 B)False

Question 19

An increase in a firm's risk will always result in a higher share price since the stockholder must be compensated for the greater risk.

Accepted Answer

A) True 
 B)False

Question 20

In a corporation, the board of directors are elected by the ________.

Accepted Answer

A)  chief executive officer 
B)  creditors 
C)  stockholders 
D)  employees 
A)  chief executive officer 
B)  creditors 
C)  stockholders 
D)  employees

By concentrating on cash flows within a firm, the financial manager should be able to ________.

Which of the following is a duty of a financial manager in a business firm?

________ is one of the primary responsibilities of a financial manager.

Which of the following is an area of career opportunities in financial services?

Which of the following is an example of agency costs?

Which of the following forms of organizations is the easiest to form?

The wealth of the owners of a corporation is represented by ________.

An accountant's primary function is ________.

Investment decisions generally refer to the items that appear on the ________.

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

The president or chief executive officer is elected by a firm's stockholders and has ultimate authority to guide corporate affairs and make general policy.

Which of the following is one of the positive benefits of an effective ethics program?

A financial manager must choose between four alternative Assets: 1, 2, 3, and 4. Each asset costs $35,000 and is expected to provide earnings over a three-year period as described below. Based on the wealth maximization goal, the financial manager would choose ________.

Institutional investors are professional investors who work on behalf of individuals, business, and government.

Which of the following is an example of a firm's stakeholder?

The key variables in the owner wealth maximization process are ________.

In large companies, CEOs are legally responsible for coordinating the assets and liabilities of the employees' pension fund.

An increase in a firm's risk will always result in a higher share price since the stockholder must be compensated for the greater risk.

In a corporation, the board of directors are elected by the ________.

The Financial Market Environment

Financial Statements and Ratio Analysis

Cash Flow and Financial Planning

Time Value of Money

Interest Rates and Bond Valuation

Stock Valuation

Risk and Return

The Cost of Capital

Capital Budgeting Techniques

Capital Budgeting Cash Flows

Risk and Refinements in Capital Budgeting

Leverage and Capital Structure

Payout Policy

Working Capital and Current Assets Management

Current Liabilities Management

Hybrid and Derivative Securities

Mergers, Lbos, Divestitures, and Business Failure

International Managerial Finance

Filters

Exam 1: The Role of Managerial Finance

By concentrating on cash flows within a firm, the financial manager should be able to ________.

Which of the following is a duty of a financial manager in a business firm?

________ is one of the primary responsibilities of a financial manager.

Which of the following is an area of career opportunities in financial services?

Which of the following is an example of agency costs?

Which of the following forms of organizations is the easiest to form?

The wealth of the owners of a corporation is represented by ________.

An accountant's primary function is ________.

Investment decisions generally refer to the items that appear on the ________.

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

The president or chief executive officer is elected by a firm's stockholders and has ultimate authority to guide corporate affairs and make general policy.

Which of the following is one of the positive benefits of an effective ethics program?

A financial manager must choose between four alternative Assets: 1, 2, 3, and 4. Each asset costs $35,000 and is expected to provide earnings over a three-year period as described below. Based on the wealth maximization goal, the financial manager would choose ________.

Institutional investors are professional investors who work on behalf of individuals, business, and government.

Which of the following is an example of a firm's stakeholder?

The key variables in the owner wealth maximization process are ________.

In large companies, CEOs are legally responsible for coordinating the assets and liabilities of the employees' pension fund.

An increase in a firm's risk will always result in a higher share price since the stockholder must be compensated for the greater risk.

In a corporation, the board of directors are elected by the ________.

The Financial Market Environment

Financial Statements and Ratio Analysis

Cash Flow and Financial Planning

Time Value of Money

Interest Rates and Bond Valuation

Stock Valuation

Risk and Return

The Cost of Capital

Capital Budgeting Techniques

Capital Budgeting Cash Flows

Risk and Refinements in Capital Budgeting

Leverage and Capital Structure

Payout Policy

Working Capital and Current Assets Management

Current Liabilities Management

Hybrid and Derivative Securities

Mergers, Lbos, Divestitures, and Business Failure

International Managerial Finance

Filters