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Exam 16: Mastering Financial Management

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Question 91

Multiple Choice

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The usual repayment period for long-term business loans is

A) before the end of the first year.
B) at the end of the first year.
C) in two to three years.
D) in three to seven years.
E) at the end of ten years.

F) B) and D)
G) B) and C)

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Question 92

Multiple Choice

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Jones Manufacturing needs $450,000 to build a new plant. It must also spend $200,000 on new equipment for the plant. Both of these needs are examples of

A) equity-capital needs.
B) debt-capital needs.
C) short-term financing needs.
D) long-term financing needs.
E) cash-flow problems.

F) A) and D)
G) All of the above

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Question 93

Multiple Choice

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How many times can a corporation's stock be sold in the primary market?

Short-term financing is used to start a new business.

What is cash flow? Why is cash flow important to a business?

Long-term financing should be used to do which of the following?

The date on the face of a bond telling when the face value is to be repaid is called the

The Nasdaq, part of the ___ market, provides price information on more than 3,600 stocks.

The interest rate and repayment terms for term loans often are based on such factors as the reasons for borrowing, the borrowing firm's credit rating, and the value of collateral.

The primary sources of funds available to a business include all of the following except

Which of the following is not a characteristic of short-term financing?

Most small businesses can expect to obtain venture capital financing if they have a good credit history of paying their bills on time.

​Joshua, age five, was given a share of common stock in the Walt Disney Company. As a ____ he has the right to vote on major corporate actions.

Morgan's Transition Morgan is currently a manager of a small financial planning firm. He is seeking a new career with a large corporation in the banking industry. He recently applied for the financial manager opening at G & T Bank. He is concerned that the transition from his small firm to a large corporation will be difficult. To better prepare himself for this change, he has decided to enroll in a few business classes to strengthen his understanding of corporate financ -Refer to Morgan's Transition. Morgan's business classes taught him that the financial manager should do which of the following?

Jacob and Molly decide to start a new cake-decorating business. They each contribute $10,000 to get the business off the ground. This money is considered

Kevin received unsecured financing from a bank for his plumbing business. This means that Kevin did not have to provide the bank with any

Morgan's Transition Morgan is currently a manager of a small financial planning firm. He is seeking a new career with a large corporation in the banking industry. He recently applied for the financial manager opening at G & T Bank. He is concerned that the transition from his small firm to a large corporation will be difficult. To better prepare himself for this change, he has decided to enroll in a few business classes to strengthen his understanding of corporate finance. The business classes have proven to be a valuable tool for learning the critical skills needed to fully understand a financial plan, equity financing, and debt financing. Morgan now believes he has strengthened his competitive advantage in his quest for the job. -Refer to Morgan's Transition. When Morgan creates a financial plan, his first step should be which of the following?

A firm that specializes in buying other firms' accounts receivable is called a(n)

Slater Co. has very old computers and manufacturing equipment and knows it needs to upgrade them or risk losing much of its business. Slater does not have the money to purchase the computers, so it will most likely need

A cash budget estimates a firm's expenditures for major assets like replacement of obsolete equipment and mergers and acquisitions.