Question 1

Each of the following causes a cash flow problem except

Accepted Answer

A)   a large proportion of credit sales.
B)   embezzlement of company funds.
C)   unexpected slow selling seasons.
D)   slow-paying customers.
E)   customers who pay early.

Question 2

In regards to cash flow, a firm should ideally have

Accepted Answer

A)   enough money coming into the firm to cover the expenses in that period.
B)   more cash flowing out than in since this represents growth.
C)   to use short-term financing only two to three times a year.
D)   a constant need for short-term financing.
E)   most of its cash going to its customers.

Question 3

For a department store such as Macy's, the most likely need for short-term financing will be for

Accepted Answer

A)   inventory.
B)   employee wages.
C)   extending credit policies.
D)   new locations.
E)   additional cash registers.

Question 4

Baxter Equipment earned $300,000 last year. Its owners' equity totaled $2,500,000. Based on these amounts, what is the firm's return on owners' equity?

Accepted Answer

A)   1.2 percent
B)   8.33 percent
C)   12 percent
D)   122 percent
E)   It is impossible to calculate the return on owners' equity with this information.

Question 5

Use of a warehouse receipt in short-term financing indicates that

Accepted Answer

A)   a loan has been secured by inventory.
B)   a loan has been obtained to purchase raw materials.
C)   a shipper or freight company has bought merchandise from a company.
D)   fur coats are being stored in a retail location.
E)   the lender is taking precautions because the loan is unsecured.

Question 6

Money obtained through various types of loans is called

Accepted Answer

A)   cash flow.
B)   factor proceeds.
C)   dividends.
D)   equity capital.
E)   debt capital.

Question 7

The two types of stock a company can sell are

Accepted Answer

A)   asset and convertible.
B)   preferred and standard.
C)   common and class.
D)   equity and asset.
E)   preferred and common.

Question 8

How many times can a corporation's stock be sold in the primary market?

Accepted Answer

A)   Once
B)   Twice
C)   A maximum of three times
D)   Once per year
E)   Unlimited

Question 9

When each new budget is based on the dollar amounts contained in the budget from the preceding year, a company is using ____ budgeting.

Accepted Answer

A)   zero-base
B)   traditional
C)   cash
D)   capital
E)   production

Question 10

To raise money, Fawcett Productions sold its accounts receivable to a ____. In doing so, Fawcett received cash and shifted to the other company both the task of collecting and the risk of nonpayment.

Accepted Answer

A)   credit-reporting agency
B)   stockbroker
C)   factor
D)   real estate agent
E)   credit union

Question 11

The first step in building a budget is to identify sources of debt financing.

Accepted Answer

A) True 
 B)False

Exam 19: Mastering Financial Management

Each of the following causes a cash flow problem except

Correct Answer
verified

The first step in building a budget is to identify sources of debt financing.

Correct Answer
verified

The two types of stock a company can sell are

Correct Answer
verified

To raise money, Fawcett Productions sold its accounts receivable to a ____. In doing so, Fawcett received cash and shifted to the other company both the task of collecting and the risk of nonpayment.

Correct Answer
verified

In regards to cash flow, a firm should ideally have

Correct Answer
verified

Money obtained through various types of loans is called

Correct Answer
verified

Baxter Equipment earned $300,000 last year. Its owners' equity totaled $2,500,000. Based on these amounts, what is the firm's return on owners' equity?

Correct Answer
verified

For a department store such as Macy's, the most likely need for short-term financing will be for

Correct Answer
verified

When each new budget is based on the dollar amounts contained in the budget from the preceding year, a company is using ____ budgeting.

Correct Answer
verified

How many times can a corporation's stock be sold in the primary market?

Correct Answer
verified

Use of a warehouse receipt in short-term financing indicates that

Correct Answer
verified

Exam 19: Mastering Financial Management

Each of the following causes a cash flow problem except

Correct AnswerverifiedShow Answer

The first step in building a budget is to identify sources of debt financing.

Correct AnswerverifiedShow Answer

The two types of stock a company can sell are

Correct AnswerverifiedShow Answer

To raise money, Fawcett Productions sold its accounts receivable to a ____. In doing so, Fawcett received cash and shifted to the other company both the task of collecting and the risk of nonpayment.

Correct AnswerverifiedShow Answer

In regards to cash flow, a firm should ideally have

Correct AnswerverifiedShow Answer

Money obtained through various types of loans is called

Correct AnswerverifiedShow Answer

Baxter Equipment earned $300,000 last year. Its owners' equity totaled $2,500,000. Based on these amounts, what is the firm's return on owners' equity?

Correct AnswerverifiedShow Answer

For a department store such as Macy's, the most likely need for short-term financing will be for

Correct AnswerverifiedShow Answer

When each new budget is based on the dollar amounts contained in the budget from the preceding year, a company is using ____ budgeting.

Correct AnswerverifiedShow Answer

How many times can a corporation's stock be sold in the primary market?

Correct AnswerverifiedShow Answer

Use of a warehouse receipt in short-term financing indicates that

Correct AnswerverifiedShow Answer

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verified

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