BU101 CH 16

Ida is interested in pursuing a career in finance. Successful managers and employees in finance must have all but which of the following credentials or skills?

A juris doctor degree

As an executive manager for a paint manufacturing company, Patrick understands the importance of effective financial management to the success of his company. Which of the following is incorrect regarding proper financial management?

It must ensure that the company "go public" with an initial public offering within the first ten years of the firm's existence.

Last month, the seafood restaurant Mariana owns and operates took in $157,350 in total receipts, and spent $142, 575 in total fixed and variable costs. This movement of money into and out of Mariana's restaurant represents which of the following?

Cash flow

As a budding entrepreneur, Haji is interested in the importance of effective financial management to the success of a business. Which of the following is incorrect regarding proper financial management?

It must ensure that the firm pays dividends to its shareholders.

Batini plans to start up a new tattoo parlor in town. To open her parlor, Batini takes out a three-year, $20,000 small business loan from a local bank. She uses the money to lease a building and purchase necessary equipment. This loan represents which of the following?

Long-term financing

Rin owns and operates a residential kitchen cabinet manufacturing company. Based on previous experience, Rin knows that although she will have a production run of cabinets in January, those cabinets may not sell until April, when the weather for home construction improves. This time lag between Rin's actual production of cabinetry in January and when it is sold in April is which of the following?

Speculative production

Marlon operates a textile manufacturing business in Birmingham, Alabama. Due to the highly competitive nature of the industry both domestically and internationally, Marlon micromanages every penny of his company's expenses. He specifically requires that every expense in his company's budget must be justified. Marlon's approach to budgeting is known as which of the following?

Zero-base budgeting