Chapter 18 Quiz

A  repayment scheduling.

B  amortization installment.

C  term loan agreement.

D  revolving line of credit.

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

B  Taxes represent an inflow of cash to the firm.

C  Profitable businesses usually pay taxes.

D  Tax management falls within the responsibility of marketing managers.

A  debt financing and government funds.

B  retained earnings and commercial paper.

C  equity financing and trade credit.

D  debt financing and equity financing.

A  CPA’s

B  investment banker’s

C  portfolio manager’s

D  financial manager’s

A  forecasting financial needs.

B  developing budgets.

C  establishing financial control.

D  preparing financial statements.

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

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

A  intensity of competition the firm faces with new products.

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

C  general level of market interest rates.

D  current level of government regulations.

A  prepare financial statements for managers.

B  forecast the impact of technological trends.

C  establish budgets for financial control.

D  optimize the firm’s profitability.

A  manage accounts payable.

B  audit the company ledgers.

C  develop tax strategies.

D  manage accounts receivable.

A  trade credit

B  commercial paper

C  a revolving credit agreement

D  a bond issue

A  loans provided by factors do not require collateral.

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

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

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

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

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

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

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

A  indenture agreement.

B  promissory note.

C  line of credit.

D  factoring agreement.

A  Factoring

B  Secured credit

C  Trade credit

D  Revolving credit

A  factor agreement

B  line of credit

C  cash flow conversion

D  renewable income option

A  undercapitalization

B  inadequate financial control

C  a cash flow issue

D  undervalued inventory

A  poor advertising messages

B  undercapitalization

C  inability to recruit qualified workers

D  inadequate market control

A  derivatives.

B  budgeting.

C  planning.

D  control.

A  income statement

B  balance sheet

C  forecast

D  budget

A  retained earnings

B  depreciated assets

C  bonds

D  stock