Chapter 18 Quiz

A  repayment scheduling.

B  revolving line of credit.

C  term loan agreement.

D  amortization installment.

A  Taxes represent an inflow of cash to the firm.

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

C  Tax management falls within the responsibility of marketing managers.

D  Profitable businesses usually pay taxes.

A  debt financing and equity financing.

B  retained earnings and commercial paper.

C  debt financing and government funds.

D  equity financing and trade credit.

A  investment banker’s

B  financial manager’s

C  portfolio manager’s

D  CPA’s

A  preparing financial statements.

B  forecasting financial needs.

C  establishing financial control.

D  developing budgets.

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

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

C  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.

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

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

B  intensity of competition the firm faces with new products.

C  current level of government regulations.

D  general level of market interest rates.

A  prepare financial statements for managers.

B  optimize the firm’s profitability.

C  establish budgets for financial control.

D  forecast the impact of technological trends.

A  manage accounts payable.

B  audit the company ledgers.

C  manage accounts receivable.

D  develop tax strategies.

A  commercial paper

B  a revolving credit agreement

C  a bond issue

D  trade credit

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

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

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 large amount of assets tied up in accounts receivable.

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

A  promissory note.

B  line of credit.

C  indenture agreement.

D  factoring agreement.

A  Factoring

B  Revolving credit

C  Trade credit

D  Secured credit

A  cash flow conversion

B  renewable income option

C  factor agreement

D  line of credit

A  inadequate financial control

B  undervalued inventory

C  undercapitalization

D  a cash flow issue

A  inadequate market control

B  inability to recruit qualified workers

C  undercapitalization

D  poor advertising messages

A  budgeting.

B  planning.

C  derivatives.

D  control.

A  balance sheet

B  income statement

C  forecast

D  budget

A  depreciated assets

B  bonds

C  retained earnings

D  stock