Intro Business - Chapter 18 - Financial Management

When Preferred Pet Care Inc., a mobile veterinary care company, first started operations, it extended three months of credit to customers. It soon began to experience a cash flow problem. A finance professional was hired to:

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

The managers of Dakota Clothing regularly compare their actual profits with the firm's projected profits. When deviations occur, the managers use the feedback to take corrective action when necessary. The management of Dakota Clothing is exercising financial:

A promissory note that requires the borrower to repay the loan in specified installments is called a(n):

Undercapitalization refers to the problem of:

Although best used as a last resort, many small businesses find it convenient to use __________ as a short-term source of financing. Although this form short-term debt comes with high interest rates, it provides a quick line of credit for many firms, including start-up companies who may not be able to secure bank loans.

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):

Money has a time value because:

___________ offer short-term secured loans to high-risk borrowers. These loans usually require collateral.

One of the challenges of effective financial management is:

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

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

A(n) __________ is responsible for verifying that the accounting procedures within a firm are consistent with established accounting principles.

Which of the following represents a capital expenditure?

A _________ forecast predicts the revenues, costs, and expenses a firm will incur for a period of one year or less.

___________ refers to the process that identifies variances by comparing actual revenues and expenses to projected revenues and expenses.

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

Venture capital firms look to invest their funds in firms that _________.

The Making Ethical Decisions box "Good Finance or Bad Medicine" has an important message for managers who make financial decisions. Which of the following statements summarizes this message?

Vitale Jewelers obtains needed short-term funds by selling its accounts receivable to the Friendly Finance Company. Friendly Finance usually pays Vitale about 80% of the value of the receivables. Vitale Jewelers utilizes ________ as a means of raising short-term funds.

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

Which of the following presents an effective technique to improve cash management?

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

If a company wants to predict how much money it can make this coming year, it would benefit from developing a:

The terms of the agreement in a bond issue are referred to as the:

Lending institutions may offer a borrower a percentage of the value of the borrower's accounts receivable so the borrowing firm can continue to operate while it waits to collect on its credit sales. This process is called _________.

If a company secures a one-year bank loan this is considered ______.

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

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:

_________ offers financially stable corporations a technique to raise short-term funds by issuing unsecured promissory notes to the general public with the promise of repayment within 270 days.

A loan backed by collateral represents a(n):

The overall objective of financial planning is to:

Acquiring funds through borrowing represents:

By purchasing stock in Entertainment Today, Veronica has become a(n) ________ the company.

Ariel, a recent graduate in finance from a well-known university, was hired by a large corporation to work in tax management. Ariel's goal is:

Finance managers spend the majority of their time managing ____.

Businesses match their long-term capital needs to:

Businesses acquire long-term financing from two major sources:

Which of the following statements about taxes is accurate?

With plans to build a $50 million theme park, Extreme Entertainment, Inc., intends to finance this project through the sale of additional shares of ownership in their firm. Selling new shares of stock represents ___________ financing.

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

The first step in the financial planning process is:

To secure financing for a planned expansion, Ohio Electronics borrowed $400,000 from King Finance. The ________ loan agreement requires that Ohio Electronics provide the title to their factory as collateral.

Which of the following organizations would be most likely to acquire short-term funding by issuing commercial paper?

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

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.

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

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

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.

The concept time value of money indicates:

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.

Maryland Nursery offers customers credit terms of 3/15, net 30. This gives customers a:

Carolina Financial Services is considering the purchase and installation of an expensive computer network. This is the type of expenditure that would be included in a(n):

Which of the following is a primary area of concern for financial managers?

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: