A collection center:
1.involves using geographically disbursed centers to collect from non-paying customers
2.utilizes local banks to clear local payments made to the collection center
3.is lower in cost to the firm than a lockbox system
4.results in checks being forwarded to a P.O. box and clearing through local bank branches
Posted Date:-2021-11-20 13:32:41
A higher degree of financial leverage may be desirable for:
1.a stable firm, with positive growth, under favorable economic conditions
2.an unstable firm operating in an uncertain environment
3.a unstable firm operating in an uncertain environment
4.neither the stable nor unstable firm under any circumstances
Posted Date:-2021-11-20 16:49:19
A major advantage of using short term funds is:
1.there is no advantage
2.there are always more easily obtained
3.there are no governmental procedures with which to comply
4.interest rates are normally lower
Posted Date:-2021-11-20 13:32:17
A series of payments required to accumulate a given amount is known as:
1.future value-annuity
2.present value-annuity
3.annuity equalling a future amount
4.annuity equalling a present amount
Posted Date:-2021-11-20 13:34:47
All methods used in evaluating risk in capital budgeting have one thing in common:
1.they use the coefficient of variation to determine the discount rate
2.risk classes are used to determine discount rates
3.they use computer-based statistical analysis
4.they recognize the differences in risk levels and adjust for them
Posted Date:-2021-11-20 13:48:35
All of the following are characteristics of private placements except:
1.there are no securities commission filing requirements
2.there is less flexibility for the firm
3.initial costs may be lower than with a public issue
4.the interest rate is usually higher due to lower liquidity
Posted Date:-2021-11-20 13:50:10
All of the following are characteristics of the 1990s mergers and divestitures except:
1.mergers between entertainment firms was popular
2.mergers between financial services firms was also common
3.the federal government was active in divesting crown corporations
4.high interest rates made mergers more costly than in the 1970s and 1980s
Posted Date:-2021-11-20 13:54:15
All of the following are characteristics of the expansion stage of corporate growth except:
1.sales expansion continues, but at a decreasing rate
2.returns on investment decline
3.the asset expansion rate increases
4.the firm is better able to pay higher cash dividends
Posted Date:-2021-11-20 13:52:57
All of the following are characteristics of the term loan, except:
1.credit is extended for one to seven years
2.the loan is repaid in one lump sum at maturity
3.only superior credit applicants qualify
4.interest rates may commonly change with market conditions
Posted Date:-2021-11-20 16:52:12
All of the following are steps in the decision-making process of a good capital budgeting process except:
1.obtaining the necessary financing
2.collection of data
3.evaluation and decision making
4.re-evaluation and adjustment
Posted Date:-2021-11-20 13:47:16
As the least liquid of the current assets, inventory:
1.could technically be classified as a capital asset and amortized
2.should be managed using level production
3.should be managed using seasonal production
4.should provide the highest yield to justify investment
Posted Date:-2021-11-20 16:51:28
As the owners of the firm, common shareholders:
1.have a primary claim on earnings
2.have the right to vote on all important corporate issues
3.have a legally enforceable right to dividends
4.play a secondary role in financing the firm
Posted Date:-2021-11-20 13:51:53
Bonds are rated based on all of the following criteria except:
1.ability to make interest payments
2.consistency of performance
3.debt-equity ratio
4.nominal yield
Posted Date:-2021-11-20 13:51:27
Business risk relates to:
1.the ability of the firm to hold its competitive position
2.the ability of the firm to maintain growth in its earnings
3.the ability of the firm to maintain stability in the earnings
4.all of the above are correct
Posted Date:-2021-11-20 16:53:43
Canadian mortgages have interest compounded:
1.annually
2.semiannually
3.monthly
4.it depends on the payment period
Posted Date:-2021-11-20 16:53:13
Characteristics of pledging accounts receivable include all of the following, except:
1.the sale of receivables to a finance company
2.the lender stipulates which accounts are of sufficient quality
3.60-80% of the value of the acceptable collateral may be borrowed
4.the interest rate is normally well in excess of prime
Posted Date:-2021-11-20 13:33:52
Dividends may be considered relevant because:
1.they increase the investor's overall return
2.a higher return will be earned than with retained earnings
3.they are preferred by investors in higher tax brackets
4.they resolve uncertainty in the minds of investors
Posted Date:-2021-11-20 13:52:33
Financial risk relates to:
1.the ability of the firm to pay dividends
2.the ability of the firm to access capital markets for additional funds
3.the ability of the firm to meet debt obligations as they come due
4.the firm's financial risk premium
Posted Date:-2021-11-20 13:35:27
Foreign exchange risk may be best defined as:
1.the chance of value change in foreign exchange rates
2.the chance that the demand for your currency will drop
3.the chance that exchange rates will be fixed
4.the political risk posed by foreign governments
Posted Date:-2021-11-20 13:56:24
Fundamental factors influencing exchange rates include:
1.inflation, government policies, translation exposure
2.interest rates, government policies, and expropriation
3.balance of payments, spot rates, and expropriation
4.government policies, balance of payments, inflation
Posted Date:-2021-11-20 13:55:42
Future value of an amount allowed to grow at a given interest rate over a period of time is known as the:
1.future value-single amount
2.present value-single amount
3.future value-annuity
4.present value-annuity
Posted Date:-2021-11-20 16:52:43
If a bond with a face value of $1,000, coupon rate and yield to maturity of 8%, and conversion ratio of 20, sees a drop in the common price to 25, the value of the security will be:
1.$500
2.greater than $1,000
3.less than $1,000
4.$1,000
Posted Date:-2021-11-20 13:53:43
In designing working capital policy, the financial manager is concerned with yield curve and:
1.dividend policy
2.balance of trade figures
3.the relative volatility of short and long term rates
4.the term structure of interest rates
Posted Date:-2021-11-20 16:50:21
In determining the appropriate capital mix, the starting point for the firm is:
1.the cost of common equity
2.the optimum capital structure
3.the present capital structure
4.the after-tax cost of debt
Posted Date:-2021-11-20 16:54:58
In monitoring collection policy, the firm should look at all of the following, except:
1.average collection period
2.ratio of bad debts to credit sales
3.aging of accounts receivable
4.terms of credit
Posted Date:-2021-11-20 13:33:04
In most capital budgeting decisions, the emphasis is on:
1.reported income
2.cash flows
3.short-term profits
4.maximization of shareholder wealth
Posted Date:-2021-11-20 16:55:26
In order to determine cash receipts, the financial manager must know:
1.projected sales and the collection pattern
2.projected sales and the profit margin
3.gross profit and the collection pattern
4.gross profit and taxes
Posted Date:-2021-11-20 16:47:36
In preparing the pro forma balance sheet, all of the following will normally remain unchanged from the prior period except:
1.accounts receivable
2.marketable securities
3.long term debt
4.common stock
Posted Date:-2021-11-20 13:30:47
In recent years Government of Canada funding requirements have:
1.increased and become more short term
2.increased and become more long term
3.decreased and become more short term
4.decreased and become more long term
Posted Date:-2021-11-20 13:48:59
In return for providing loans and other services, banks may require that business customers maintain
1.a specified profit margin
2.a compensating balance
3.a sinking fund
4.a specified growth rate
Posted Date:-2021-11-20 13:33:28
Nonresident holdings of Canadian securities are most significant in the:
1.bond market
2.money market
3.stock market
4.mortgage market
Posted Date:-2021-11-20 13:49:23
On the books of the acquiring firm, a merger may be treated as:
1.a cash purchase or a pooling of interests
2.a stock-for-stock exchange
3.a purchase of assets
4.a pooling of interests or a purchase of assets
Posted Date:-2021-11-20 13:55:06
Risk in capital budgeting may be defined as:
1.the chance the firm won't be able to meet its debt obligations
2.the possibility of the firm losing its competitive position
3.the variability of possible outcomes from a given investment
4.the possibility that the firm can't obtain funds needed to finance the desired asset
Posted Date:-2021-11-20 13:48:09
The basic discount rate used in net present value analysis is:
1.the internal rate of return
2.the cost of common equity
3.the net discount rate
4.the cost of capital to the firm
Posted Date:-2021-11-20 16:55:51
The beta coefficient measures:
1.the return relative to the risk-free rate
2.the return relative to the market return
3.the historical volatility relative to the market's volatility
4.the required return on a financial asset
Posted Date:-2021-11-20 13:46:42
The conservative firm will utilize:
1.a high degree of operating leverage
2.a low degree of operating leverage
3.high fixed costs
4.a higher profit margin
Posted Date:-2021-11-20 13:31:12
The coupon rate on a bond is:
1.the initial or face value of the bond
2.the yield to maturity
3.the rate at which the principal of the bond accrues
4.the stated interest rate of the bond
Posted Date:-2021-11-20 13:50:41
The degree of financial leverage may be defined as:
1.percent change in sales/percent change in volume
2.percent change in EPS/percent change in net income
3.percent change in EPS/percent change in EBIT
4.percent change in EPS/percent change in sales
Posted Date:-2021-11-20 13:31:35
The main focus of a stock-for-stock exchange is on:
1.the earnings per share impact of the exchange
2.the capital budgeting implications
3.the shareholders of the acquired firms
4.the growth opportunities
Posted Date:-2021-11-20 13:54:45
The main function of the investment dealer is to serve as:
1.the middleperson between the firm in need of funds and investors
2.underwriter
3.an advisor to the firm
4.a market maker
Posted Date:-2021-11-20 13:49:46
The mix of debt and equity in a firm is referred to as the firm's:
1.primary capital
2.capital composition
3.cost of capital
4.capital structure
Posted Date:-2021-11-20 13:57:22
The purchaser or holder of a call option has:
1.the obligation to sell the underlying security
2.the obligation to buy the underlying security
3.the right but not the obligation to sell the underlying security
4.the right but not the obligation to buy the underlying security
Posted Date:-2021-11-20 13:53:18
The required rate of return on an equity investment can be determined by:
1.the P/E yield plus the growth rate
2.the dividend yield plus the growth rate
3.the earnings yield
4.the revenue growth rate
Posted Date:-2021-11-20 16:54:18
The value today of an amount to be received at some point in the future is known as:
1.present value-annuity
2.future value-annuity
3.present value-single amount
4.future value-single amount
Posted Date:-2021-11-20 13:34:19
To enhance overall operating results, a firm should prudently use which of the following:
1.operating leverage
2.financial leverage
3.combined leverage
4.conservative leverage
Posted Date:-2021-11-20 13:31:56
To the bondholder, the most important ratio is:
1.profit margin
2.quick ratio
3.times interest earned
4.debt to total assets
Posted Date:-2021-11-20 13:30:25
Treasury bills are:
1.government obligations with a maturity of 3-5 years
2.sold at a discount to face value
3.the only government security that pays cash dividends
4.extremely illiquid, although extremely safe
Posted Date:-2021-11-20 16:50:54
Under the net present value method:
1.the interest rate is determined that equates inflows and outflows
2.the time value of money is not taken into account
3.inflows are discounted back to determine if they exceed outflows
4.the basic discount rate is the internal rate of return
Posted Date:-2021-11-20 13:47:42
Under the percent of sales method, the relationship between sales and what type accounts are assumed to maintain or constant relationship:
1.Income Statement
2.cash budget
3.balance sheet
4.cash flows.
Posted Date:-2021-11-20 16:48:31
Which of the following are not among the daily activities of financial management?
1.sale of stocks and bonds
2.credit management
3.inventory control
4.the receipt and disbursement of funds
Posted Date:-2021-11-20 13:56:49