MGT 111 Final Chapter 18

To determine overall direction and ascertain a need for major​ investments, a firm should consider​ what? Financial management acumen ​Risk/return trade-off The external financial environment Financial plans A strategic plan

A strategic plan

When determining how to buy inventory at the lowest costs​ possible, what do financial and operations managers​ use? Liquidity ​Risk/return trade-off Strategic plans Working capital Economic order quantity

Economic order quantity

​______ consist(s) of acquiring capital through the sales of accounts receivables. Equity financing Prospectus Factoring Debt financing Leverage

Factoring

​A(n) ______ is​ unsecured, is supported only by the reputation of the​ issuer, and is​ risky, and so therefore accrues higher interest. lease secured bond convertible bond debenture equity

debenture

Which of the following defines a technique for raising the amount of return on an investment through capital borrowed from external​ sources? Debentures Leverage Equity financing Factoring Opportunity cost

Leverage

Selling ownership in a firm to raise funds is called​ _______. debt financing cost of capital ​long-term financing ​short-term financing equity financing

equity financing

A​ _______ is backed by company assets​ that, if borrowed loans are not​ repaid, will be presented to bond owners. lease bond debenture secured bond convertible bond

secured bond

When managers provide input as to the amounts they need to run their​ departments, what type of budgeting approach is being​ used? ​Bottom-up requests Financial control ​Top-down mandate Hedging Rolling forecasts

​Bottom-up requests

The equilibrium between possible threats and prospective compensation is known as​ ________. ​risk/return trade-off accounts receivable financial planning hedging ​zero-based budgeting

​risk/return trade-off

A method that requires departments to commence their financial year with nothing in their​ budget, compelling departments to indicate how funds are spent in order to validate each item that goes into the​ budget, is known as​ _________. hedging leveraging ​short-term financing ​zero-based budgeting debt financing

​zero-based budgeting

Any physical possession a creditor is allowed to take over if a debtor fails to pay a loan back is called​ _______. leverage a line of credit collateral compensating balance a trade credit

collateral

​______ involves collecting money owed to a business. Cost of capital Hedging Accounts receivable ​Zero-based budgeting Accounts payable

Accounts receivable

Which type of budget identifies costs for major​ equipment, new​ facilities, and other significant​ investments? Operating budget ​Zero-based budget ​Start-up budget Project budget Capital budget

Capital budget

Which of the following is a​ short-term promissory note to pay back a​ loaned-out amount within a specified time with a stated interest​ rate? Compensating balance Commercial paper Bond Convertible bond Debenture

Commercial paper

Which of the following is the percentage of an unsecured loan that is retained by the financier in order to protect it and to raise its​ yield? Leverage Bond Compensating balance Trade credit Collateral

Compensating balance

The average percentage of interest a firm pays for loans is called​ what? Cost of capital Opportunity cost Prime interest rate ​Long-term financing ​Short-term financing

Cost of capital

​________ refers to organizing and gathering capital through various lenders. Capital budgeting Opportunity cost Equity financing Cost of capital Debt financing

Debt financing

Which of the following is the interest rate charged by the Federal Reserve to commercial​ banks? Fluctuating rate Opportunity cost Discount rate Prime rate Rate of return

Discount rate

​_______ refers to the method of examining and altering a simple financial plan to account for abnormalities stemming from forecasted events. Financial control Project budgeting Hedging Leveraging Factoring

Financial control

Which of the following involves defending against rate surges with agreements that businesses can purchase resources in the future at predetermined​ prices? Leveraging Prospectus ​Zero-based budgeting Financial control Hedging

Hedging

Which of the following​ include(s) venture capital and other company possessions that are not traded​ openly? Private equity Secured bonds Common stock Corporate bonds Debentures

Private equity

Which of the following involves a document that reveals material about a​ company, its​ capital, and its strategies for utilizing the future capital it anticipates​ raising? Commercial paper Private equity Debenture Convertible bond Prospectus

Prospectus

If a firm is considered to be highly​ leveraged, what does that mean for the​ firm's finances? The firm can take advantage of downturns in the economy to gain market share. The firm has higher​ risk/return trade-off. The firm carries a lot of debt. The firm spends more than average on advertising. The firm is poised to take advantage of competitors.

The firm carries a lot of debt.

Which of the following is often called ​open-account purchasing​? Unsecured loans Collateral Compensating balance Trade credit Factoring

Trade credit

The bills a firm owes to its​ vendors, lenders, and other parties are called​ __________. accounts receivable economic order quantity accounts payable liquidity working capital

accounts payable