business process ch 16 smartbook
dle cash typically does not earn interest for the company, thus financial managers try to keep small amounts of cash on hand, called Blank______, to pay current bills such as wages, supplies, and utilities. Multiple choice question. commercial paper lockbox money working capital transaction balances
transaction balances
index
A comparison of current stock prices with those in a specified base period
Choose the correct definition for a transaction balance. Multiple choice question. A transaction balance is the difference between credit extended to suppliers and credit used by suppliers. A transaction balance is an account where funds are saved in order to pay off long-term liabilities such as bond issues. A transaction balance is an arrangement by which a bank agrees to lend a specified amount of money to a firm upon request. A transaction balance is cash kept on hand by a firm to pay normal daily expenses such as employee wages and bills such as utility payments.
A transaction balance is cash kept on hand by a firm to pay normal daily expenses such as employee wages and bills such as utility payments.
What is a debenture? Multiple choice question. another name for a bond contract a secured bond an unsecured bond the interest rate on a bond
an unsecured bond
Current ______are short-term resources such as cash, investments, accounts receivable, and inventory.
assets
A(n) ______________ is a debt instrument that larger companies and governments sell to raise long-term funds.
bond
Cash, investments, accounts receivable, and inventory are all examples of Blank______. Multiple choice question. current liabilities working management capital current assets operating funds
current assets
Select the two common ways firms raise funds for long-term assets. Multiple select question. capital budgeting factoring debt financing equity financing
debt and equity
When businesses calculate the costs to borrow money for capital budget projects they must be sure to include the Blank______ expenses for the debt used to finance the project.
interest
When businesses calculate the costs to borrow money for capital budget projects they must be sure to include the Blank______ expenses for the debt used to finance the project. Multiple choice question. equity factor principal interest
interest
Money an organization owes to suppliers for goods and services is called Blank______. Multiple choice question. idle cash accounts payable accounts receivable trade credit
accounts payable
A __________ is like an IOU with a promise to repay the amount borrowed, with interest, on a certain date.
bond
Quinn works for a manufacturing company and is in the process of making a decision about the funding of future projects. Since the company has outlined more potential projects than can actually be funded, Quinn must select those projects that promise the greatest future return for the company. Quinn is involved in the process of: Multiple choice question. capital budgeting. strategic goal setting. factoring. asset budgeting.
capital budgeting
Quinn works for a manufacturing company and is in the process of making a decision about the funding of future projects. Since the company has outlined more potential projects than can actually be funded, Quinn must select those projects that promise the greatest future return for the company. Quinn is involved in the process of: Multiple choice question. factoring. capital budgeting. asset budgeting. strategic goal setting.
capital budgeting
The process of analyzing the needs of the business and selecting assets that will maximize its value is called Blank______.
capital budgeting
Ali owns stock in a U.S. publicly-traded company. As a shareholder, she is a(n) Blank______ of the corporation. Multiple choice question. employee owner supplier creditor
owner
What three things make up stockholders' equity? Multiple select question. retained earnings dividends yet to be paid preferred stock common stock corporate business assets
preferred stock common stock retained earnings
Which type of stock does not trade on the OTC (over-the-counter) market? Multiple choice question. small stocks pink sheet stocks large corporate stocks penny stocks
large corporate stocks
In the broadest terms, the securities markets can be thought of as providers of Blank______ to investors. Multiple choice question. persistency controllability liquidity consistency
liquidity
Which potential investment project would pose the least amount of risk for a firm? Multiple choice question. repairing old machinery and equipment expanding operations into a foreign market buying a new warehouse adding a new product to the company's product line
repairing old machinery and equipment
What market handles the trading of securities between investors rather than the company that issued the stock or bonds? Multiple choice question. public market over-the-counter (OTC) market secondary market primary market
secondary market
Which of the following provides a mechanism for buying and selling securities? Multiple choice question. primary markets secondary markets investment banking securities markets
securities markets
The NYSE and the NASDAQ are Blank______.
stock markets
The NYSE and the NASDAQ are Blank______. Multiple choice question. mutual funds types of bonds investment banks stock markets
stock markets
Name the two largest stock markets in the United States. Multiple select question. the New York Stock Exchange the OTC market the Chicago Stock Exchange the NASDAQ
the New York Stock Exchange the NASDAQ
Choose the correct definition for a transaction balance. Multiple choice question. A transaction balance is the difference between credit extended to suppliers and credit used by suppliers. A transaction balance is cash kept on hand by a firm to pay normal daily expenses such as employee wages and bills such as utility payments. A transaction balance is an account where funds are saved in order to pay off long-term liabilities such as bond issues. A transaction balance is an arrangement by which a bank agrees to lend a specified amount of money to a firm upon request.
A transaction balance is cash kept on hand by a firm to pay normal daily expenses such as employee wages and bills such as utility payments.
primary market
Market where new issues of stocks and bonds are sold to the public
Because most corporate bonds and all U.S. government debt securities are traded in the Blank______ market, this market regularly accounts for the largest total dollar value of all the secondary markets. Multiple choice question. ICE NASDAQ OTC NYSE
OTC
Which market has no central location and is a network of dealers all over the country? Multiple choice question. NASDAQ NYSE OTC ICE
OTC
secondary market
Stock exchanges and over-the-counter markets where investors can trade previously owned stock
average
The calculated average of certain stock prices
Joan owns a flower shop. As a small business owner, she carefully manages the finances of her business. If Joan purchases flowers from a local producer for $500 and agrees to pay for the flowers within a month, Joan will list the $500 bill as Blank______ on her balance sheet. Multiple choice question. revenue an asset accounts receivable accounts payable long-term debt
accounts payable
True or False: Financial management is limited to business organizations.
false
Overall, a company must be able to cover both Blank______ costs or it will eventually fail. Multiple choice question. employee and shareholder financial and operating principal and interest goods and services
financial and operating
The field that addresses the issues of obtaining and managing the funds and resources necessary to run a business successfully is called Blank______. Multiple choice question. financial management portfolio management operations management accounting
financial management
Production facilities, office equipment, and heavy machinery are assets that are expected to last many years and are called long-term or Blank______ assets.
fixed
What three items are long-term (fixed) assets? Multiple select question. inventory cash heavy machinery production facilities automobiles accounts receivable
heavy machinery production facilities automobiles
Newer and less prosperous firms must pay Blank______ costs to attract capital because these companies tend to be quite risky.
higher
Naveen owns a distribution supply company. He is trying to decide whether or not to develop a robotic delivery system. All of the following are items Naveen should consider when making his decision except Blank______. Multiple choice question. how long the project is expected to last the state of the world economy as a whole how he can use his competitor's equipment the stability of the marketplace
how he can use his competitors equiptment
As a measurement of stock prices, a(n) Blank______ compares current stock prices with those in a specified base period. Multiple choice question. index average issue factor
index
Idle cash typically does not earn interest for the company, thus financial managers try to keep small amounts of cash on hand, called Blank______, to pay current bills such as wages, supplies, and utilities. Multiple choice question. commercial paper transaction balances working capital lockbox money
transaction balances
Idle cash typically does not earn interest for the company, thus financial managers try to keep small amounts of cash on hand, called Blank______, to pay current bills such as wages, supplies, and utilities. Multiple choice question. lockbox money working capital transaction balances commercial paper
transaction balances
Which bonds are not backed by any specific collateral, such as land or equipment? Multiple choice question. sinking fund bonds unsecured bonds mortgage bonds secured bonds
unsecured bonds
