Chapter 18 Quiz

A  term loan agreement.

B  repayment scheduling.

C  revolving line of credit.

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  retained earnings and commercial paper.

B  debt financing and equity financing.

C  debt financing and government funds.

D  equity financing and trade credit.

A  CPA’s

B  investment banker’s

C  financial manager’s

D  portfolio manager’s

A  forecasting financial needs.

B  establishing financial control.

C  preparing financial statements.

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

B  intensity of competition the firm faces with new products.

C  general level of market interest rates.

D  current level of government regulations.

A  forecast the impact of technological trends.

B  prepare financial statements for managers.

C  establish budgets for financial control.

D  optimize the firm’s profitability.

A  manage accounts payable.

B  manage accounts receivable.

C  audit the company ledgers.

D  develop tax strategies.

A  a bond issue

B  trade credit

C  commercial paper

D  a revolving credit agreement

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

B  loans provided by factors do not require collateral.

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 large amount of assets tied up in accounts receivable.

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

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

A  indenture agreement.

B  line of credit.

C  promissory note.

D  factoring agreement.

A  Factoring

B  Secured credit

C  Trade credit

D  Revolving credit

A  renewable income option

B  factor agreement

C  line of credit

D  cash flow conversion

A  inadequate financial control

B  undercapitalization

C  undervalued inventory

D  a cash flow issue

A  inadequate market control

B  undercapitalization

C  poor advertising messages

D  inability to recruit qualified workers

A  budgeting.

B  control.

C  derivatives.

D  planning.

A  balance sheet

B  income statement

C  budget

D  forecast

A  retained earnings

B  depreciated assets

C  bonds

D  stock