Ch 16 OpenStax Homework

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Question #1

Which of the following businesses would be most likely to require an unsecured bank loan, such as a line of credit or a revolving credit agreement?

A a Christmas tree farm

B a poultry producer

C a manufacturer of health and beauty aids

D an envelope manufacturer

E a manufacturer of integrated circuits

Question #2

A(n) _____ is a type of loan often used to finance buildup of inventory for seasonal (cyclical) businesses just before their strongest sales period.

A secured bank loan

B unsecured bank loan

C commercial paper loan

D trade credit

E collateral loan

Question #3

When Magna Manufacturing sells hand on screwdriver sets to Malloy Building Supply Company, Magna bills the tool manufacturer for the screwdriver purchase with terms of payment, which specify when the account is due. This type of unsecured loan is called _____ credit.

A factored

B trade

C borrower’s

D product

E revolving

Question #4

The three main types of unsecured short-term loans are:

A accounts payable, notes payable, and loans payable

B trade credit, bank loans, and commercial paper

C treasury bills, certificates of deposit, and accounts payable

D commercial paper, accounts payable, and trade credit

E trade credit, accounts payable, and bank loans

Question #5

Short-term loans:

A have a maturity of one year or longer

B are shown as a capital expenditure on the balance sheet

C are always secured

D are shown as a current liability on the balance sheet

E do not require any collateral

Question #6

Capital budgeting:

A helps select new products

B combines all budgets into a master budget

C allows managers to analyze profit and loss statements

D analyzes production costs

E selects asset proposals for maximum profitability

Question #7

_____ is the process of selecting the capital expenditures that offer the best returns and meet the goal of maximizing the firm’s value.

A Capital allocation

B Capital evaluation

C Budget allocation

D Capital budgeting

E Budget analysis

Question #8

Which of the following would be an example of a capital expenditure for a superstore that specializes in outdoor grills and other items needed for outside dining?

A a handheld calculator

B a parking lot

C order forms

D cardboard sale signs

E pens and markers

Question #9

As the Toronto-based Four Seasons hotel chain remodels an existing hotel in Mumbai to bring it to the five-star hotel’s exacting standards, it is building a magnificent revolving restaurant overlooking the Arabian Sea at World. The restaurant structure is an example of a(n):

A account receivable

B capital expenditure

C intangible asset

D material cost

E operating cost

Question #10

Funds invested in long-lived assets, such as land, buildings, machinery, and equipment, are called:

A manufacturing expenses

B capital expenditures

C material costs

D operating expenses

E production costs

Question #11

The cost of inventory to the firm includes all of the following EXCEPT:

A handling costs

B purchase price

C ordering costs

D insurance costs

E selling costs

Question #12

_____ are specific repayment conditions as to how long customers have to pay bills and the amount of cash discount allowed.

A Sales terms

B Credit terms

C Revolving accounts

D Liability procedures

E Credit credentials

Question #13

Grainger Distribution Company sold Long Electronics ten circuit breakers for $179.00 each. Long Electronics will be allowed thirty days to pay the bill. Grainger will carry the $1790.00 on its books as a(n):

A marketable security

B account payable

C account receivable

D current liability

E fixed liability

Question #14

The three most popular types of marketable securities are Treasury bills, certificates of deposit, and:

A money market funds

B commercial paper

C corporate bonds

D checking accounts

E Treasury notes

Question #15

Commercial paper is:

A a type of IOU

B the same thing as accounts receivable recorded in the ledger

C typically issued by stakeholders

D a type of secured debt

E accurately described by none of the above

Question #16

_____ is a short-term unsecured debt issued by a financially strong corporation.

A Commercial paper

B A certificate of deposit

C A treasury bill

D A money market deposit

E Investment credit

Question #17

Short-term investments that are easily converted back to cash and are used by financial managers to achieve higher returns than those offered by checking accounts are:

A corporate equities

B corporate securities

C marketable credits

D negotiable securities

E management vehicles

Question #18

Financial managers often shift temporary funds from checking accounts to _____ securities to earn higher interest returns.

A operational

B marketable

C strategic

D commercial

E administrative

Question #19

Chez Dove is an independent coffeehouse/bookstore that went bankrupt only eight months after opening due to an unexpected demand for cash to fix a leaking roof. Better cash _____ might have allowed the business to continue operation.

A administration

B capitalization

C targeting

D maintenance

E management

Question #20

Making sure that enough cash is on hand to pay bills as they come due and to meet unexpected expenses is called cash:

A maintenance

B management

C capitalization

D administration

E targeting

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Ch 16 OpenStax Homework

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Below are the questions for the exam with the choices of answers:

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Tyra

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