Ch 16 OpenStax Homework

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Question #1

Which of the following businesses would be most likely to require an unsecured bank loan, such as a line of credit or a revolving credit agreement?

A a Christmas tree farm

B a manufacturer of integrated circuits

C a manufacturer of health and beauty aids

D a poultry producer

E an envelope manufacturer

Question #2

A(n) _____ is a type of loan often used to finance buildup of inventory for seasonal (cyclical) businesses just before their strongest sales period.

A commercial paper loan

B unsecured bank loan

C trade credit

D collateral loan

E secured bank loan

Question #3

When Magna Manufacturing sells hand on screwdriver sets to Malloy Building Supply Company, Magna bills the tool manufacturer for the screwdriver purchase with terms of payment, which specify when the account is due. This type of unsecured loan is called _____ credit.

A borrower’s

B revolving

C product

D trade

E factored

Question #4

The three main types of unsecured short-term loans are:

A commercial paper, accounts payable, and trade credit

B trade credit, bank loans, and commercial paper

C accounts payable, notes payable, and loans payable

D trade credit, accounts payable, and bank loans

E treasury bills, certificates of deposit, and accounts payable

Question #5

Short-term loans:

A have a maturity of one year or longer

B do not require any collateral

C are shown as a capital expenditure on the balance sheet

D are always secured

E are shown as a current liability on the balance sheet

Question #6

Capital budgeting:

A combines all budgets into a master budget

B selects asset proposals for maximum profitability

C analyzes production costs

D allows managers to analyze profit and loss statements

E helps select new products

Question #7

_____ is the process of selecting the capital expenditures that offer the best returns and meet the goal of maximizing the firm’s value.

A Capital allocation

B Budget allocation

C Capital budgeting

D Capital evaluation

E Budget analysis

Question #8

Which of the following would be an example of a capital expenditure for a superstore that specializes in outdoor grills and other items needed for outside dining?

A a parking lot

B order forms

C pens and markers

D a handheld calculator

E cardboard sale signs

Question #9

As the Toronto-based Four Seasons hotel chain remodels an existing hotel in Mumbai to bring it to the five-star hotel’s exacting standards, it is building a magnificent revolving restaurant overlooking the Arabian Sea at World. The restaurant structure is an example of a(n):

A material cost

B intangible asset

C capital expenditure

D account receivable

E operating cost

Question #10

Funds invested in long-lived assets, such as land, buildings, machinery, and equipment, are called:

A material costs

B production costs

C operating expenses

D manufacturing expenses

E capital expenditures

Question #11

The cost of inventory to the firm includes all of the following EXCEPT:

A handling costs

B selling costs

C insurance costs

D ordering costs

E purchase price

Question #12

_____ are specific repayment conditions as to how long customers have to pay bills and the amount of cash discount allowed.

A Liability procedures

B Sales terms

C Credit terms

D Credit credentials

E Revolving accounts

Question #13

Grainger Distribution Company sold Long Electronics ten circuit breakers for $179.00 each. Long Electronics will be allowed thirty days to pay the bill. Grainger will carry the $1790.00 on its books as a(n):

A marketable security

B fixed liability

C account receivable

D current liability

E account payable

Question #14

The three most popular types of marketable securities are Treasury bills, certificates of deposit, and:

A checking accounts

B Treasury notes

C money market funds

D commercial paper

E corporate bonds

Question #15

Commercial paper is:

A typically issued by stakeholders

B a type of IOU

C the same thing as accounts receivable recorded in the ledger

D a type of secured debt

E accurately described by none of the above

Question #16

_____ is a short-term unsecured debt issued by a financially strong corporation.

A Commercial paper

B A treasury bill

C A certificate of deposit

D A money market deposit

E Investment credit

Question #17

Short-term investments that are easily converted back to cash and are used by financial managers to achieve higher returns than those offered by checking accounts are:

A negotiable securities

B corporate equities

C marketable credits

D corporate securities

E management vehicles

Question #18

Financial managers often shift temporary funds from checking accounts to _____ securities to earn higher interest returns.

A operational

B strategic

C marketable

D commercial

E administrative

Question #19

Chez Dove is an independent coffeehouse/bookstore that went bankrupt only eight months after opening due to an unexpected demand for cash to fix a leaking roof. Better cash _____ might have allowed the business to continue operation.

A targeting

B maintenance

C management

D capitalization

E administration

Question #20

Making sure that enough cash is on hand to pay bills as they come due and to meet unexpected expenses is called cash:

A maintenance

B administration

C capitalization

D management

E targeting

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Ch 16 OpenStax Homework

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Below are the questions for the exam with the choices of answers:

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Tyra

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