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Exam 18: Financial Management

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Question 141

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Financial managers are responsible for budgeting,auditing,and advising top management on financial matters.

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Question 142

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Akiko realizes the importance of developing a ________ for her interior design business.Akiko understands the importance of appropriately allocating resources in order to achieve the goals of her firm.

A) market prediction
B) financial forecast
C) budget
D) cash flow analysis

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Question 143

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Financial management is more important for a large firm than it is for a small firm.

The most widely used source of short-term funding is trade credit.

A _________ forecast predicts the future cash inflows and outflows in future periods.

Equity financing must be repaid.

Chunky Chicken,Inc.announced yesterday that it plans to issue $100 million in debenture bonds to fund the expansion of its fast food chain of restaurants.In financial terms,this means:

Which of the following statements is most accurate?

By identifying variances from the financial plan,managers are able to focus on those departments that require corrective action.

If a company secures a three year bank loan,it is considered _________.

Green Builder's Supply,Inc.does not offer customers a cash discount for early payment of their accounts receivable.As a result,most customers wait to pay their bill on the last day before late penalties are charged.These customers apparently understand the:

Mini-Case Tishian's Funeral Home has been in business for over eighty years.Throughout its history,the firm has been a family-run operation.Today,the business is managed by Mort Tishian,a grandson of the founder.Unfortunately,Mort Tishian's tenure has been plagued with problems neither his father nor grandfather before him experienced.The reason is simple: the funeral business is undergoing rapid change.Small,family-owned funeral homes are losing ground to a new type of competitor,a large national network service that resembles a franchise system.More and more families "in their time of need" are choosing the new,highly promoted competitors instead of the traditional small family-operated funeral homes. This trend has required a response from organizations like Tishian's Funeral Home.Bigger and better facilities are needed to remain competitive.All of this puts more pressure on the family-owners to be more active in the financial side of the business.Mort summed it up best when he said,"Grandpa told people,'you pay me when you can,I ain't goin' nowheres.'" His creditors did the same with him.Today,it's a different game.Cash flow is key,and obtaining funds is no simple task.Additionally,creditors want their money now,not later.Banks are also more demanding."Heck,Grandpa knew all the bankers he dealt with personally.I see new faces every time I go to the bank.If things don't get better,I suspect after eighty years of service,Tishian's Funeral Home will have its own funeral." -After seeing Mort's advertisement: "You Aren't Gettin' Any Younger! Start Planning for Heaven Today!" a(n) ___________ firm decided the aging population was a good investment.Although they typically look at start-ups with great promise,they approached Mort with $6 million dollars for a major three-city expansion that included six new funeral homes,a crematory,and mausoleum.After researching the idea,Mort agreed to give-up 50% ownership of the business in order to secure these funds.His last thoughts as he began to sign the papers were: "Now,I'll be able to compete with the big guys!"

Which of the following activities is most likely to be performed by a financial manager?

As John considers approaching a venture capital firm to provide funding for his new software firm,he should realize that a venture capital firm will:

A budget reflects management's expectations for revenues and allocates the use of specific resources throughout the firm.

A share of stock represents a company-issued IOU including a promise to repay on a certain date.

Family and friends represent "problem free" sources of financing for most small businesses.

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

The CFO of a well known satellite radio company was trying to work his magic today as he solicited another telecommunications/entertainment company to invest in his company in order to prevent bankruptcy.Having refinanced the company less than a year ago,the satellite radio finance manager had a $75 million note coming due today.The current financing arrangement represents:

A comptroller is the chief accounting officer of an organization.