Chapter 18 Quiz

A  amortization installment.

B  term loan agreement.

C  revolving line of credit.

D  repayment scheduling.

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  equity financing and trade credit.

B  retained earnings and commercial paper.

C  debt financing and equity financing.

D  debt financing and government funds.

A  investment banker’s

B  CPA’s

C  portfolio manager’s

D  financial manager’s

A  establishing financial control.

B  preparing financial statements.

C  forecasting financial needs.

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

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

A  general level of market interest rates.

B  current level of government regulations.

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

D  intensity of competition the firm faces with new products.

A  forecast the impact of technological trends.

B  optimize the firm’s profitability.

C  establish budgets for financial control.

D  prepare financial statements for managers.

A  develop tax strategies.

B  manage accounts payable.

C  audit the company ledgers.

D  manage accounts receivable.

A  trade credit

B  commercial paper

C  a bond issue

D  a revolving credit agreement

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

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

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

D  loans provided by factors do not require collateral.

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

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

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

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

A  factoring agreement.

B  promissory note.

C  indenture agreement.

D  line of credit.

A  Secured credit

B  Factoring

C  Trade credit

D  Revolving credit

A  renewable income option

B  line of credit

C  cash flow conversion

D  factor agreement

A  undervalued inventory

B  inadequate financial control

C  undercapitalization

D  a cash flow issue

A  undercapitalization

B  poor advertising messages

C  inadequate market control

D  inability to recruit qualified workers

A  derivatives.

B  control.

C  budgeting.

D  planning.

A  budget

B  forecast

C  income statement

D  balance sheet

A  stock

B  bonds

C  retained earnings

D  depreciated assets