Finance

4) An agreement to use an asset in exchange for regular payment; similar to renting is an example of a Alease B) trade credit C) corporate bond D) long-term loan E) commercial paper

Lease

2) Managers use a(n). to outline expenditures for real estate, new facilities, major equipment, etc. A) operating budget B) project budget C)master budget D) capital budget E) start-up budget

Master budget

6) ___ refer to a method of funding in which the issuer borrows from an investor and provides a written promise to make regular interest payments and repay the borrowed amount in the future. A) Bonds B) Trade credit C) Project budget D) Working capital E) Operating budget

A) Bonds

7) Hedging refers to forming contracts that allow a company to ___ A) obtain funds for a short period without contracts that allow a paying interest B)buy supplies in the future at designated prices C) finance long-term debt on a credit to buyers exterior relationships with many firms continuous basis designated prices D)engage in buy-seller relationships with many firms E) issue letters of oj engage in buyer-seller to the home country

B) Buy supplies in the future at designated prices

9) Which of the following is a major difference between debt financing and equity financing? A) Equity financing has a specific maturity period, whereas debt financing usually has no specific maturity period. B) Repayment of debt financing is not linked to organizational performance, unlike equity financing. C)Equity holders have primary claims on assets unlike debt financiers. D) Payments to equity holders reduce taxable income, whereas debt payments are not tax deductible. E) Debt financing is used to cover long-term expenses, whereas equity financing is used for current expenses.

B) Repayment of debt financing is not linked to organizational performance, unlike equity financing

8) A company that is highly leveraged is considered to have A)High Risk with high reward B)low risk with high reward C)high debt D)a liquidity crisis E)high accounts receivable

C) High debt

1) A____ is a firm's mix of debt and A) data structure equity financing. B) financial plan C) cash flow D) budget E capital structure

Capital Structure

10) The lowest rate of interest that banks charge for short-term loans to their most creditworthy customers is called the ____ A) discount rate B) simple interest rate C) cost of capital D) prime interest rate E) collateral free

D) Prime interest rate

3) Planning for a firm's money needs and manacing the allocation and spending of funds is called (a) A) economic order B) financial management C) strategic plan D) financial statement E) risk/return trade-off analysis

Financial management

5) Accounts receivable refers to____ A) the total of owners funds invested in a business B)the total annual revenue of a company C)amounts that a firm owes to other parties D)the money owed to a firm by its customers E)the total interest payments made by the firm

The money owed to a firm by its customers