BUS 300 CH 16

_____ is a short-term unsecured debt issued by a financially strong corporation.

Commercial paper

Term loans:

are available from commercial banks, insurance companies, pension funds, commercial finance companies, and manufacturer's financing subsidiaries may be repaid on a quarterly, semiannual, or annual schedule are capital expenditure loans with a maturity of more than one year can be secured or unsecured

Financial managers focus on _____, the inflow and outflow of cash.

cash flows

Which of the following businesses would be most likely to require an unsecured bank loan, such as a line of credit or a revolving credit agreement?

christmas tree farm (a seasonal business)

A secured loan requires that the borrower pledge specific assets to secure the loan. These assets are called:

collateral

The major advantage of debt financing is the:

deductibility of interest expenses

When a firm goes public, it must reveal such information as:

financing plans product details financial data operating data

What does cost of inventory to the firm include?

ordering costs handling costs purchase price insurance costs interest

In seeking a balance between the opportunity for profit and the potential for loss, a financial manager is dealing with the concept of _____ trade-off.

risk-return

Capital budgeting:

selects asset proposals for maximum profitability

The cost of inventory to the firm includes all of the following EXCEPT

selling cost