BUS 300 Ch 16 quiz

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

Commercial paper

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?

a Christmas tree farm

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

all of the above

Term loans:

are accurately described by all of the above

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 major advantage of debt financing is the:

deductibility of interest expenses

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 costs