A Forecast Predicts The Revenues Costs And Expenses

Question: Typically, only highly regarded customers with financial stability receive __________.

  1. secured loans

  2. B. bank premiums

  3. C. unsecured loans

  4. D. commercial paper

  5. Answer: C. unsecured loans

  6. Question: A firm negotiates a(n) _________ with its bank. This arrangement gives the firm access to a specified amount of unsecured short-term funds, provided the bank has the funds available.

  7. A. asset drawing account

  8. B. capital drawing agreement

  9. C. reserve account

  10. D. line of credit

  11. Answer: D. line of credit

  12. Question: By selling shares of ownership in their company, California Scientific acquires the funds needed to finance their research and development projects. California Scientific provides for their long-term funding needs through ________ financing.

  13. A. debt

  14. B. equity

  15. C. retained

  16. D. asset

  17. Answer: B. equity

  18. Question: An effective budget requires:

  19. A. a successful advertising campaign.

  20. B. accurate forecasts.

  21. C. management approval.

  22. D. stakeholder consensus.

  23. Answer: B. accurate forecasts.

  24. Question: Delaware Aluminum uses its stock of unsold aluminum products as collateral for a short-term loan. This arrangement represents:

  25. A. a secured loan.

  26. B. a revolving credit agreement.

  27. C. factoring.

  28. D. an unsecured loan.

  29. Answer: A. a secured loan.

  30. Question: By borrowing $10 million from First Dayton Bank, Hi-Lo Industries is utilizing ________.

  31. A. equity financing.

  32. B. debt financing.

  33. C. liability funding.

  34. D. asset funding.

  35. Answer: B. debt financing.

  36. Question:

  37. Answer: A. Permitting customers to pay with credit cards or on credit makes it easier for them to buy, and it also attracts new customers.

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

  39. A. short-term financing

  40. B. asset funding

  41. C. liability funding

  42. D. long-term financing

  43. Answer: D. long-term financing

  44. Question: Which of the following represents a source of short-term funding?

  45. A. Retained earnings

  46. B. Commercial paper

  47. C. Common stock

  48. D. Corporate bonds

  49. Answer: B. Commercial paper

  50. Question: Which of these statements about corporate bonds is correct?

  51. A. Bonds provide equity financing.

  52. B. Issuing new bonds dilutes the existing ownership in the firm.

  53. C. Interest paid to bondholders represents a tax-deductible business expense.

  54. D. Debenture bonds require assets pledged as collateral.

  55. Answer: C. Interest paid to bondholders represents a tax-deductible business expense.

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