Chapter 18 Quiz

A  repayment scheduling.

B  term loan agreement.

C  revolving line of credit.

D  amortization installment.

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

B  Profitable businesses usually pay taxes.

C  Tax management falls within the responsibility of marketing managers.

D  Taxes represent an inflow of cash to the firm.

A  equity financing and trade credit.

B  retained earnings and commercial paper.

C  debt financing and government funds.

D  debt financing and equity financing.

A  portfolio manager’s

B  financial manager’s

C  CPA’s

D  investment banker’s

A  preparing financial statements.

B  developing budgets.

C  forecasting financial needs.

D  establishing financial control.

A  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.

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

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  establish budgets for financial control.

B  prepare financial statements for managers.

C  forecast the impact of technological trends.

D  optimize the firm’s profitability.

A  manage accounts payable.

B  manage accounts receivable.

C  audit the company ledgers.

D  develop tax strategies.

A  trade credit

B  a bond issue

C  commercial paper

D  a revolving credit agreement

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

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

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

D  loans provided by factors do not require collateral.

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

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

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

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

A  indenture agreement.

B  line of credit.

C  factoring agreement.

D  promissory note.

A  Factoring

B  Trade credit

C  Revolving credit

D  Secured credit

A  line of credit

B  renewable income option

C  factor agreement

D  cash flow conversion

A  a cash flow issue

B  inadequate financial control

C  undercapitalization

D  undervalued inventory

A  poor advertising messages

B  inability to recruit qualified workers

C  undercapitalization

D  inadequate market control

A  derivatives.

B  control.

C  planning.

D  budgeting.

A  income statement

B  balance sheet

C  budget

D  forecast

A  retained earnings

B  bonds

C  depreciated assets

D  stock