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200. If a company wants to predict how much money it can make this coming year, it would
benefit from developing a:
201. Which of the following would be most helpful for a company looking to know the income
potential during the next five years?
202. Carolina Financial Services is considering the purchase and installation of an expensive
computer network. This is the type of expenditure that would be included in a(n):
203. The managers of Dakota Clothing regularly compare their actual profits with the firm's
projected profits. When deviations occur, the managers use the feedback to take corrective
action when necessary. The management of Dakota Clothing is exercising financial:
204. As a management consultant, Lamont knows that regardless of how good his firm's
product might be, the business has little chance of success without a(n):
205. Akiko realizes the importance of developing a ________ for her interior design business.
Akiko understands the importance of appropriately allocating resources in order to achieve the
goals of her firm.
206. As a finance manager at AllSports Communication, Charlie worries about the firm's
borrowing requirements for the upcoming year. He knows the benefit of estimating AllSports'
cash disbursements and short-term investment expectations. Facing these concerns, a(n)
________ would provide Charlie with valuable information by providing a good estimation of
whether the firm will need to do short-term borrowing.
207. The finance manager at AllSports Communication has asked his assistant, Ben, to
prepare the ________ budget. Ben will gather as much information as possible by utilizing the
firm's other budgets and any documents that summarize proposed financial activities.
208. One of the challenges of effective financial management is:
209. The concept
time value of money
indicates:
210. Money has a time value because:
211. The rationale behind offering customers credit is:
212. A major concern for firms selling on credit is:
213. To reduce the time and expense of collecting their accounts receivable, some firms:
214. A just-in-time inventory system allows a firm to:
215. Acquiring funds through borrowing represents:
216. If a firm sells shares of stock, it is financing with _______.
217. If a company secures a three-year bank loan, this is considered _________.
218. If a company secures a one-year bank loan this is considered ______.
219. The effective management of accounts receivable requires financial managers to:
220. Which of the following would normally involve long-term financing?
221. The
Making Ethical Decisions
box "Good Finance or Bad Medicine" has an important
message for managers who make financial decisions. Which of the following statements
summarizes this message?
222. With plans to build a $50 million theme park, Extreme Entertainment, Inc., intends to
finance this project through the sale of additional shares of ownership in their firm. Selling new
shares of stock represents ___________ financing.
223. The owner of Mountain Cycle Shop worries that cash flows this winter may be
insufficient to meet his current operating expenses. While he anticipates a surplus of cash
inflows as warm weather approaches, he needs funds now to meet his immediate obligations. He
can best resolve his cash flow concerns by obtaining ________ financing.
224. Lancer Wholesale Company wants to improve cash flow. Which of the following
strategies would be most likely to help Lancer achieve this objective?
225. Which of the following presents an effective technique to improve cash management?
226. If you are at the Phoenix Sky Harbor International Airport, you will no longer get a pat-
down if you go through the metal detector. The airport now has full body screening ports that
scan the entire body and readily detect weapons or explosive devices that someone may want to
take on board a plane. These expensive devices represent:
227. Green Builder's Supply, Inc., does not offer customers a cash discount for early payment
of their accounts receivable. As a result, most customers wait to pay their bill on the last day
before late penalties are charged. These customers apparently understand the:
228. Which of the following represents a capital expenditure?
229. By selling shares of ownership in their company, California Scientific acquires the funds
needed to finance their research and development projects. California Scientific provides for their
long-term funding needs through ________ financing.
230. The CFO of a satellite radio company was trying to work his magic today as he solicited
another telecommunications/entertainment company to invest in his company in order to prevent
bankruptcy. Having refinanced the company less than a year ago, the satellite radio finance
manager had a $75 million note coming due today. The current financing arrangement
represents:
231. Which of the following statements represents good advice prior to making capital
expenditures?
