Chapter 18 Quiz

A  revolving line of credit.

B  term loan agreement.

C  repayment scheduling.

D  amortization installment.

A  Taxes represent an inflow of cash to the firm.

B  Tax management falls within the responsibility of marketing managers.

C  Taxes cannot be managed because of fluctuations in political policy.

D  Profitable businesses usually pay taxes.

A  debt financing and government funds.

B  equity financing and trade credit.

C  debt financing and equity financing.

D  retained earnings and commercial paper.

A  financial manager’s

B  portfolio manager’s

C  CPA’s

D  investment banker’s

A  forecasting financial needs.

B  establishing financial control.

C  preparing financial statements.

D  developing budgets.

A  A new company struggling because it has insufficient start-up funds.

B  A large corporation that has been hit with a major lawsuit because one of its products has a design flaw that has led to serious injuries.

C  An electric utility that has recently experienced a significant increase in the cost of coal and labor.

D  A medium-sized company that has decided to buy out a smaller competitor.

A  exchange rate of the euro to the U.S. dollar.

B  general level of market interest rates.

C  intensity of competition the firm faces with new products.

D  current level of government regulations.

A  forecast the impact of technological trends.

B  establish budgets for financial control.

C  optimize the firm’s profitability.

D  prepare financial statements for managers.

A  audit the company ledgers.

B  manage accounts receivable.

C  manage accounts payable.

D  develop tax strategies.

A  trade credit

B  a bond issue

C  a revolving credit agreement

D  commercial paper

A  interest paid to a factor qualifies for a tax credit.

B  small firms often find it difficult to qualify for bank loans.

C  loans provided by factors do not require collateral.

D  factoring provides a much cheaper source of funds than bank loans.

A  the inability to utilize factoring as a source of financing.

B  the large amount of assets tied up in accounts receivable.

C  the resulting increase in the debt ratio for the firm.

D  the realization that many credit customers always pay their bills.

A  factoring agreement.

B  indenture agreement.

C  line of credit.

D  promissory note.

A  Secured credit

B  Factoring

C  Revolving credit

D  Trade credit

A  renewable income option

B  line of credit

C  factor agreement

D  cash flow conversion

A  inadequate financial control

B  undervalued inventory

C  undercapitalization

D  a cash flow issue

A  inability to recruit qualified workers

B  undercapitalization

C  inadequate market control

D  poor advertising messages

A  control.

B  budgeting.

C  planning.

D  derivatives.

A  income statement

B  forecast

C  balance sheet

D  budget

A  bonds

B  stock

C  depreciated assets

D  retained earnings