Bus 100 Credit

_____ are specific repayment conditions as to how long customers have to pay bills and the amount of cash discount allowed

Credit terms

In finance, the potential for loss is called probability.

F The potential for loss is called risk.

_____ management is the art and science used to determine the most effective ways to acquire and use funds to achieve the firm's goals

Financial

_____ management is the art and science used to determine the most effective ways to acquire and use funds to achieve the firm's goals.

Financial

Which statement describes the major drawback to the use of debt financing?

Financial risk is always a possibility with debt financing.

_____ are investment professionals who are paid to manage other people's money

Institutional investors

The oldest and largest organized securities exchange in the United States is the

New York Stock Exchange

The benefits from capital expenditures extend beyond one year's time

T

What are the three main types of unsecured short-term loans?

Trade Credit: Accounts Payable Bank Loans Commercial Paper

financial managers

are described by none of the above

Organized stock exchanges operate like a(n)

auction company

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

cash flows

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

collateral

The Securities Investor Protection Corporation (SIPC)

insures the accounts of customers of brokerage firms for up to $500,000 against a firm failure

The primary activity of _____ is underwriting.

investment bankers

Making sure that enough cash is on hand to pay bills as they come due and to meet unexpected expenses is called cash

management

In finance, the opportunity for profit is called

return

Payments in the form of more stock to existing stockholders are called

stock dividends

The major advantage of debt financing is the:

the deductibility of interest expense for income tax purposes,

Financial managers constantly strive for a balance between:

the opportunity for profit and the potential for loss

In which of the following industries are you most likely to find factoring being used

appliance industry

Sales made, but for which payment has not yet been collected, are called accounts payable

F They are called accounts receivable

Funds invested in long-lived assets, such as land, buildings, machinery, and equipment, are called:

capital expenditures

_____ is the process of selecting the capital expenditures that offer the best returns and meet the goal of maximizing the firm's value.

Capital budgeting