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Exam 18: Financial Management

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Question 81

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An effective strategy to manage cash flows requires retail businesses to eliminate their inventory.

A) True
B) False

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Question 82

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Accountants truly represent the financial managers of a business.

A) True
B) False

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Question 83

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After having visited several European resort towns, Daisy Doriddle wants to export her one-of-a-kind jewelry designs to tourist stores in several Mediterranean cities. A friend of hers who just graduated with her MBA from Northwestern University suggests that she seek the services of an international factor. As an international factor, Daisy should expect this intermediary to lend her (upfront) the total price she charges for each piece, and then wait for Daisy to sell her jewelry before asking for a percentage of the profits.

The chief financial officer (CFO) is responsible for accounting and financial functions.

Which of these is a common source of long-term financing for a corporation?

According to the "Legal Briefcase: Making Sure It's a Done Deal" box in Chapter 18, international factoring is also called "forfeiting."

A just-in-time inventory system allows a firm to:

To reduce the time and expense of collecting their accounts receivable, some firms:

Carlos is the manager of Oh! Canada Sporting Goods. During the past six months, his cash expenditures have exceeded his cash receipts. Oh! Canada is suffering from a (n) problem.

An operating budget analyzes the firm's spending plans for long-lasting assets that require large sums of money.

Central Vermont Power issued $200 million of bonds to finance a major upgrade of one of its largest power plants. The issuance of these bonds indicates that Central Vermont utilizes equity capital to meet its long-term financing needs.

Money has a time value because:

Financial managers at Sasha Deal Electronics have always had a conservative attitude toward long-term financing. In particular, they are interested in keeping risk to a minimum. This philosophy suggests that managers at Sasha Deal consider the extensive use of leverage an attractive financial strategy.

Virginia Supply offers their customers trade credit with terms 2/15 net 30. This implies that:

Which of the following correctly identifies areas of authority and responsibility for a chief financial officer (CFO) ?

A(n) job includes forecasting, budgeting, cash flow analysis, cost control, taxes, and credit management.

Robert intends to major in business. He has never had much interest in subjects with numbers. He would like to avoid taking any finance courses if possible. Robert should:

Which of the following situations represents a successful use of financial leverage?

Finance is the function in a business that acquires funds for the firm and manages those funds within the firm.

Carlos wants to know the income potential for his computer consulting business during the next five years. Which of the following would be most helpful?