Chapter 18 Quiz

A  term loan agreement.

B  revolving line of credit.

C  amortization installment.

D  repayment scheduling.

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

B  Taxes represent an inflow of cash to the firm.

C  Tax management falls within the responsibility of marketing managers.

D  Profitable businesses usually pay taxes.

A  retained earnings and commercial paper.

B  equity financing and trade credit.

C  debt financing and government funds.

D  debt financing and equity financing.

A  financial manager’s

B  investment banker’s

C  portfolio manager’s

D  CPA’s

A  establishing financial control.

B  developing budgets.

C  preparing financial statements.

D  forecasting financial needs.

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

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

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  current level of government regulations.

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  audit the company ledgers.

B  develop tax strategies.

C  manage accounts receivable.

D  manage accounts payable.

A  a revolving credit agreement

B  trade credit

C  a bond issue

D  commercial paper

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

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

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

D  loans provided by factors do not require collateral.

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

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

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

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

A  line of credit.

B  promissory note.

C  factoring agreement.

D  indenture agreement.

A  Secured credit

B  Trade credit

C  Revolving credit

D  Factoring

A  cash flow conversion

B  renewable income option

C  factor agreement

D  line of credit

A  a cash flow issue

B  inadequate financial control

C  undercapitalization

D  undervalued inventory

A  poor advertising messages

B  undercapitalization

C  inability to recruit qualified workers

D  inadequate market control

A  derivatives.

B  planning.

C  control.

D  budgeting.

A  forecast

B  income statement

C  balance sheet

D  budget

A  depreciated assets

B  bonds

C  retained earnings

D  stock