Chapter 18 Quiz

A  repayment scheduling.

B  revolving line of credit.

C  amortization installment.

D  term loan agreement.

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

B  Profitable businesses usually pay taxes.

C  Taxes represent an inflow of cash to the firm.

D  Tax management falls within the responsibility of marketing managers.

A  debt financing and equity financing.

B  equity financing and trade credit.

C  retained earnings and commercial paper.

D  debt financing and government funds.

A  CPA’s

B  financial manager’s

C  investment banker’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 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  general level of market interest rates.

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

C  intensity of competition the firm faces with new products.

D  current level of government regulations.

A  prepare financial statements for managers.

B  establish budgets for financial control.

C  optimize the firm’s profitability.

D  forecast the impact of technological trends.

A  manage accounts receivable.

B  audit the company ledgers.

C  manage accounts payable.

D  develop tax strategies.

A  commercial paper

B  a revolving credit agreement

C  trade credit

D  a bond issue

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

B  loans provided by factors do not require collateral.

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

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

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

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

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

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

A  factoring agreement.

B  promissory note.

C  indenture agreement.

D  line of credit.

A  Factoring

B  Trade credit

C  Secured credit

D  Revolving credit

A  renewable income option

B  line of credit

C  factor agreement

D  cash flow conversion

A  undercapitalization

B  a cash flow issue

C  inadequate financial control

D  undervalued inventory

A  undercapitalization

B  inadequate market control

C  inability to recruit qualified workers

D  poor advertising messages

A  derivatives.

B  budgeting.

C  control.

D  planning.

A  balance sheet

B  forecast

C  budget

D  income statement

A  depreciated assets

B  stock

C  retained earnings

D  bonds