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Exam 18: Financial Management

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Question 41

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The importance of financial managers to firms with large cash inflows is greater than for firms with smaller cash flows.

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Question 42

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A capital budget combines all of the other budgets into one detailed plan for monitoring the operations of the firm.

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Question 43

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Financial managers use data prepared by accountants to develop strategies for improving the financial performance of the firm.

After seeing Mort's advertisement: "You Aren't Gettin' Any Younger! Start Planning for Heaven Today!" an) ___________ firm decided the aging population was a good investment.Although they typically look at start-ups with great promise,they approached Mort with $6 million dollars for a major three-city expansion that included six new funeral homes,a crematory,and mausoleum.After researching the idea,Mort agreed to give-up 50% ownership of the business in order to secure these funds.His last thoughts as he began to sign the papers were: "Now,I'll be able to compete with the big guys!"

A major concern for firms selling on credit is:

A debenture bond is backed only by the reputation of the issuer.

Sound financial management involves determining the most appropriate sources of funds to meet short-term and long-term needs of an organization.

If a company secures a three year bank loan,it is considered __________.

Debt financing refers to funds acquired from the profitable operations of a firm or through the sale of ownership in the firm.

Tax management by financial managers involves the development of strategies to evade tax liabilities.

The overall objective of financial planning is to:

The long-term financial forecast gives top management some sense of the profit potential of various strategic decisions.

A revolving credit agreement is designed to reduce the risk of lending money.

Trade credit is the practice of buying goods now and paying for them later.

As a management consultant,Lamont knows that regardless of how good his firm's product might be,the business has little chance of success without an) :

Much of a financial manager's day-to-day activities involve managing the short-term financial needs of the firm.

Equity financing may involve the sale of stock representing ownership)to new investors.

The owners of Preferred Pet Care,Inc. ,a mobile pet care company,have approached you about obtaining long-term financing.They must choose between debt financing and equity financing.Which of the following statements reflects accurate information that you share with this company?

By identifying variances from the financial plan,managers are able to focus on those departments that require corrective action.

Trade credit means the seller will sell and deliver products and/or services to the buyer,with the understanding that the buyer will pay for these products and/or services at a later date.