Question 1

Borrowing money _____.

Accepted Answer

A) creates leverage 
B) increases equity 
C) decreases risk 
D) reduces liquidity 
A) creates leverage 
B) increases equity 
C) decreases risk 
D) reduces liquidity

Question 2

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 3

Paul,a financial manager at Faxeltel Inc. ,holds a meeting to discuss various aspects of investment in long-lived assets.The meeting takes into consideration the buying of new assets and the replacement of old assets.In the context of financial management,this type of decision making is called _____.

Accepted Answer

A) capital investment analysis 
B) risk-return trade-off 
C) leveraged buyout analysis 
D) divestiture planning 
A) capital investment analysis 
B) risk-return trade-off 
C) leveraged buyout analysis 
D) divestiture planning

Question 4

What is an LBO?

Accepted Answer

LBO-leveraged buyout-is a transaction wh

Question 5

Investments that promise the highest returns tend to involve the lowest amount of risk.

Accepted Answer

A) True 
 B)False

Question 6

Rhonda,a financial manager at TRM Inc. ,has to organize the finances of her company for one to two years.In the context of financial planning,she should develop a(n)_____ plan to accomplish this purpose.

Accepted Answer

A) strategic 
B) operating 
C) security 
D) leverage 
A) strategic 
B) operating 
C) security 
D) leverage

Question 7

Complete the following using the terms listed.
-_____ are private investment companies open only to qualified large investors.

Accepted Answer

A) Venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leveraged buyout
I)private equity funds
J)divestiture
K)Marketable securities
L)financial manager
M)tender offer
N)Trade credit
O)leverage
P)capital structure
Q)Asset intensity
R)bonds
S)spin-off
T)Hedge funds
U)Inventory control
V)dividends
W)debt-to-equity (D/
E) 
X)compensating balances
Y)shareholder's equity 
A) Venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leveraged buyout
I)private equity funds
J)divestiture
K)Marketable securities
L)financial manager
M)tender offer
N)Trade credit
O)leverage
P)capital structure
Q)Asset intensity
R)bonds
S)spin-off
T)Hedge funds
U)Inventory control
V)dividends
W)debt-to-equity (D/
E) 
X)compensating balances
Y)shareholder's equity

Question 8

A(n)_____ is a transaction in which one company buys another.

Accepted Answer

A) acquisition 
B) merger 
C) takeover 
D) synergy 
A) acquisition 
B) merger 
C) takeover 
D) synergy

Question 9

Discuss the responsibilities of financial managers.

Accepted Answer

Financial managers oversee the finances

Question 10

The term used to describe the benefits produced by a merger or acquisition is _____.

Accepted Answer

A) partnership 
B) leverage 
C) synergy 
D) profit 
A) partnership 
B) leverage 
C) synergy 
D) profit

Question 11

Complete the following using the terms listed.
-_____ are low-risk securities that either have short maturities or can easily be sold in secondary markets.

Accepted Answer

A) Venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leveraged buyout
I)private equity funds
J)divestiture
K)Marketable securities
L)financial manager
M)tender offer
N)Trade credit
O)leverage
P)capital structure
Q)Asset intensity
R)bonds
S)spin-off
T)Hedge funds
U)Inventory control
V)dividends
W)debt-to-equity (D/
E) 
X)compensating balances
Y)shareholder's equity 
A) Venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leveraged buyout
I)private equity funds
J)divestiture
K)Marketable securities
L)financial manager
M)tender offer
N)Trade credit
O)leverage
P)capital structure
Q)Asset intensity
R)bonds
S)spin-off
T)Hedge funds
U)Inventory control
V)dividends
W)debt-to-equity (D/
E) 
X)compensating balances
Y)shareholder's equity

Question 12

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 company 
A) Inventory 
B) Accounts receivable 
C) Marketable securities 
D) Another company

Question 13

Illustrate the concept of inventory control.

Accepted Answer

Inventory control is more than just mana

Question 14

The financial manager for a typical corporation is responsible for _____.

Accepted Answer

A) designing the accounting system 
B) gathering,recording,and reporting financial information 
C) determining the most appropriate sources and uses of funds 
D) preparing operating budgets for various departments 
A) designing the accounting system 
B) gathering,recording,and reporting financial information 
C) determining the most appropriate sources and uses of funds 
D) preparing operating budgets for various departments

Question 15

Why do firms divest assets?

Accepted Answer

Sometimes divestitures result from prior

Question 16

_____ are investment companies that raise funds from wealthy individuals and institutional investors and use the funds to make investments in both public and private companies.

Accepted Answer

A) Venture capitalists 
B) Private placements 
C) Hedge funds 
D) Private equity funds 
A) Venture capitalists 
B) Private placements 
C) Hedge funds 
D) Private equity funds

Question 17

Major current assets include all of the following EXCEPT_____.

Accepted Answer

A) accounts receivable 
B) stockholders' equity 
C) marketable securities 
D) cash 
A) accounts receivable 
B) stockholders' equity 
C) marketable securities 
D) cash

Question 18

What is factoring?

Accepted Answer

Factoring is a form of short-term financ

Question 19

_____ would be the LEAST likely to obtain a private placement.

Accepted Answer

A) Small individual investors 
B) Life insurance companies 
C) Commercial banks 
D) Pension fund managers 
A) Small individual investors 
B) Life insurance companies 
C) Commercial banks 
D) Pension fund managers

Question 20

Which of the following is true of compensating balances?

Accepted Answer

A) Compensating balances increase the effective cost of a loan. 
B) Compensating balances allow firms to convert their receivables into cash quickly. 
C) Only a small percentage of businesses can issue compensating balances. 
D) Most compensating balances are unsecured. 
A) Compensating balances increase the effective cost of a loan. 
B) Compensating balances allow firms to convert their receivables into cash quickly. 
C) Only a small percentage of businesses can issue compensating balances. 
D) Most compensating balances are unsecured.

Borrowing money _____.

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

What is an LBO?

Investments that promise the highest returns tend to involve the lowest amount of risk.

Rhonda,a financial manager at TRM Inc. ,has to organize the finances of her company for one to two years.In the context of financial planning,she should develop a(n)_____ plan to accomplish this purpose.

Complete the following using the terms listed. -_____ are private investment companies open only to qualified large investors.

A(n)_____ is a transaction in which one company buys another.

Discuss the responsibilities of financial managers.

The term used to describe the benefits produced by a merger or acquisition is _____.

Complete the following using the terms listed. -_____ are low-risk securities that either have short maturities or can easily be sold in secondary markets.

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

Illustrate the concept of inventory control.

The financial manager for a typical corporation is responsible for _____.

Why do firms divest assets?

_____ are investment companies that raise funds from wealthy individuals and institutional investors and use the funds to make investments in both public and private companies.

Major current assets include all of the following EXCEPT_____.

What is factoring?

_____ would be the LEAST likely to obtain a private placement.

Which of the following is true of compensating balances?

The Changing Face of Business

Business Ethics and Social Responsibility

Economic Challenges Facing Todays Business

Competing in World Markets

Forms of Business Ownership and Organization

Starting Your Own Business: the Entrepreneurship Alternative

Management,leadership,and the Internal Organization

Human Resource Management: From Recruitment to Labor Relations

Top Performance Through Empowerment, teamwork, and Communication

Production and Operations Management

Customer-Driven Marketing

Product and Distribution Strategies

Promotion and Pricing Strategies

Using Technology to Manage Information

Understanding Accounting and Financial Statements

The Financial System

Trends in E-Commerce

Filters

Exam 17: Financial Management

Borrowing money _____.

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

What is an LBO?

Investments that promise the highest returns tend to involve the lowest amount of risk.

Rhonda,a financial manager at TRM Inc. ,has to organize the finances of her company for one to two years.In the context of financial planning,she should develop a(n)_____ plan to accomplish this purpose.

Complete the following using the terms listed. -_____ are private investment companies open only to qualified large investors.

A(n)_____ is a transaction in which one company buys another.

Discuss the responsibilities of financial managers.

The term used to describe the benefits produced by a merger or acquisition is _____.

Complete the following using the terms listed. -_____ are low-risk securities that either have short maturities or can easily be sold in secondary markets.

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

Illustrate the concept of inventory control.

The financial manager for a typical corporation is responsible for _____.

Why do firms divest assets?

_____ are investment companies that raise funds from wealthy individuals and institutional investors and use the funds to make investments in both public and private companies.

Major current assets include all of the following EXCEPT_____.

What is factoring?

_____ would be the LEAST likely to obtain a private placement.

Which of the following is true of compensating balances?

The Changing Face of Business

Business Ethics and Social Responsibility

Economic Challenges Facing Todays Business

Competing in World Markets

Forms of Business Ownership and Organization

Starting Your Own Business: the Entrepreneurship Alternative

Management,leadership,and the Internal Organization

Human Resource Management: From Recruitment to Labor Relations

Top Performance Through Empowerment, teamwork, and Communication

Production and Operations Management

Customer-Driven Marketing

Product and Distribution Strategies

Promotion and Pricing Strategies

Using Technology to Manage Information

Understanding Accounting and Financial Statements

The Financial System

Trends in E-Commerce

Filters