Chapter 18 Review

Lancer Wholesale Company wants to improve cash flow. Which of the following strategies would be most likely to help Lancer achieve this objective?

Undercapitalization refers to the problem of:

Many small businesses rely on factoring as a source of short-term financing because:

Which of the following represents a capital expenditure?

________ examine the data prepared by ________ and then make recommendations to top management regarding strategies for improving the firm.

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

A major concern for firms selling on credit is:

Businesses match their long-term capital needs to:

Which of the following provides the buyer with collateral?

________ is a form of short-term financing. Businesses buy merchandise from their suppliers, but are not required to pay for their purchases until some future date

The interest paid on ________ represents a tax-deductible business expense.

One of the primary factors that influences the interest rate a firm pays on long-term loans is the:

Arborview Plant Science Company has invented a drought resistant grass seed that only needs watering three times each year. In order to expand distribution worldwide, the company whose product produces lush green foliage needs serious funding. The handful of seed scientists that own the company are seeking ___________, but understand that they will relinquish a sizeable share of ownership in order to obtain the funds.

__________ provide financing to new or emerging companies with high profit potential. In return, these organizations expect a share of ownership in the company.

If you are at the Phoenix Sky Harbor International Airport, you will no longer get a pat-down if you go through the metal detector. The airport now has full body screening ports that scan the entire body and readily detect weapons or explosive devices that someone may want to take on board a plane. These expensive devices represent:

Which of the following would be most helpful for a company looking to know the income potential during the next five years?

The financial manager of Carolina Graphics negotiated a ________ with her bank that allows Carolina to borrow up to $50,000 without collateral. This arrangement eliminates the need to renegotiate the terms of the loan and complete new paperwork each time Carolina borrows money. The preapproved short-term loan agreement is contingent upon the bank having the funds available.

If a firm sells shares of stock, it is financing with _______.

Which of the following companies is undercapitalized?

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:

__________ refers to the strategy of using borrowed funds to increase the rate of return for stockholders.

Long-term financing would normally be used to purchase:

As a management consultant, Lamont knows that regardless of how good his firm's product might be, the business has little chance of success without a(n):

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

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.