Archives: Quiz
Finance Chapter 17 1 The type of shareholder voting has become less important with the influence of takeovers,
Chapter 17 – Common and Preferred Stock Financing 1. Common stockholders have a residual claim to income, in other words they are last in line. TRUE Bloom’s: Remember Difficulty: Basic Learning Objective: 17-01 Common stockholders are the owners of the […]
Finance Chapter 16 3 Shannon Corporation has two bonds outstanding. Both bonds have coupon rates of 7%.
Chapter 16 – Long-Term Debt and Lease Financing 109. Which of the following are advantages of leasing? A. A lease obligation may be substantially less restrictive than the provisions of a bond indenture. B. There may be no down payment […]
Finance Chapter 16 2 The Haavelmo Widget Corporation has just signed a 60-month lease on an asset with a 6-year
Chapter 16 – Long-Term Debt and Lease Financing 71. A call feature allows: A. the bondholder to redeem the bond before the maturity date. B. the corporation to redeem the bond before the maturity date. C. the corporation to convert […]
Finance Chapter 16 1 When a company defaults on a secured debt, it is rare for the secured asset to be sold and the
Chapter 16 – Long-Term Debt and Lease Financing 1. Over the decades, the times interest earned ratio of the Standard and Poor’s’ 500 corporations has held fairly steady. FALSE Bloom’s: Remember Difficulty: Intermediate Learning Objective: 16-01 Analyzing long-term debt requires […]
Finance Chapter 15 2 In order to avoid long-term dilution, a corporation should determine whether the necessary
Chapter 15 – Investment Banking: Public and Private Placement 75. Which of the following activities is not a service provided by investment bankers? A. Underwriting initial public offerings B. Raising capital via mutual fund offerings C. Advising in mergers D. […]
Finance Chapter 15 1 The investment banker is someone who buys large new issues of stocks and then sells them to
Chapter 15 – Investment Banking: Public and Private Placement 1. The investment banker is someone who buys large new issues of stocks and then sells them to the public after their price has risen. FALSE Bloom’s: Remember Difficulty: Basic Learning […]
Finance Chapter 14 2 All of the following are recognized as an important influences in the development of the
Chapter 14 – Capital Markets 62. Which of the following statements concerning futures markets is false? A. Futures markets allow investors to manage risk. B. Futures markets can be used to hedge against changing commodity prices. C. Interest rate futures […]
Finance Chapter 13 2 Bill Broodiest, star quarterback for the Spring Bay Smashers, would like to invest a small portion
Chapter 13 – Risk and Capital Budgeting 58. A project’s cash flows have a beta of 1.2, a standard deviation of $340, and a coefficient of variation of 0.40. What is the expected cash flow? A. $850 B. $167 C. […]
Finance Chapter 13 1 Projects with high positive correlation are sometimes valuable because they allow us to smooth
Chapter 13 – Risk and Capital Budgeting 1. A basic assumption in financial theory is that most investors and managers are risk seekers. FALSE 13-1 Bloom’s: Understand Difficulty: Basic Learning Objective: 13-02 Most investors are risk-averse; which means they dislike […]
Finance Chapter 12 3 The Taylor Corporation is using a machine that originally cost $88,000. The machine is being
Chapter 12 – The Capital Budgeting Decision 107. A firm utilizes a strategy of capital rationing, which is currently $375,000 and is considering the following 2 projects: Project A has a cost of $335,000 and the following cash flows: year […]
Finance Chapter 12 2 Assuming that a firm has no capital rationing constraint and that a firm’s investment
Chapter 12 – The Capital Budgeting Decision 69. Assuming that a firm has no capital rationing constraint and that a firm’s investment alternatives are not mutually exclusive, the firm should accept all investment proposals A. for which it can obtain […]
Finance Chapter 12 1 Possibly the most overlooked part of the capital budgeting process is the search for new
Chapter 12 – The Capital Budgeting Decision 1. Capital budgeting decisions involve a minimum time horizon of five years. FALSE Bloom’s: Understand Difficulty: Basic Learning Objective: 12-01 A capital budgeting decision represents a long-term investment decision. 2. A good capital […]
Finance Chapter 11 2 The general rule for using the weighted average cost of capital (WACC) in capital budgeting
Chapter 11 – Cost of Capital 63. A firm is paying an annual dividend of $2.65 for its preferred stock which is selling for $57.00. There is a selling cost of $3.30. What is the after-tax cost of preferred stock […]
Finance Chapter 11 1 The discount rate that equates a future stream of expected dividends to the current price is a
Chapter 11 – Cost of Capital 1. It is standard practice to evaluate investment decisions using the cost of the specific financing method involved. FALSE Bloom’s: Understand Difficulty: Basic Learning Objective: 11-02 The cost of capital is normally the discount […]
Finance Chapter 10 3 Market Enterprises would like to issue bonds and needs to determine the approximate rate they
Chapter 10 – Valuation and Rates of Return 98. Market Enterprises would like to issue bonds and needs to determine the approximate rate they would need to pay investors. A firm with similar risk recently issued bonds with the following […]
Finance Chapter 10 2 An issue of common stock is expected to pay a dividend of $3 at the end of the year. Its growth
Chapter 10 – Valuation and Rates of Return 69. The longer the time to maturity: A. the greater the price increase from an increase in interest rates. B. the less the price increase from an increase in interest rates. C. […]
Finance Chapter 10 1 You hold a long-term bond yielding ten percent. If interest rates fall shortly before you sell the
Chapter 10 – Valuation and Rates of Return 1. The valuation of a financial asset is based on the concept of determining the present value of future cash flows. TRUE 10-1 Bloom’s: Understand Difficulty: Basic Learning Objective: 10-01 The valuation […]
Finance Chapter 9 3 Sara Shouppe has invested $100,000 in an account at her local bank. The bank will pay her a
Chapter 09 – The Time Value of Money 87. Kathy has $50,000 to invest today and would like to determine whether it is realistic for her to achieve her goal of buying a home for $150,000 in 10 years with […]
Finance Chapter 9 2 Football player Walter Johnson signs a contract calling for payments of $250,000 per year, to
Chapter 09 – The Time Value of Money 63. Babe Ruth Jr. has agreed to play for the Cleveland Indians for $3 million per year for the next 10 years. What table would you use to calculate the value of […]
Finance Chapter 9 1 If a single amount were put on deposit at a given interest rate and allowed to grow, its future
Chapter 09 – The Time Value of Money 9-1 1. An amount of money to be received in the future is worth less today than the stated amount. Bloom’s: Understand Difficulty: Basic Learning Objective: 09-01 Money has a time value […]
Finance Chapter 8 3 Brand Advertising is offered a 3/10 net 40 trade discount by its supplier. In the past Brand has
Chapter 08 – Sources of Short-Term Financing 109. The effective rate on a $20,000 installment loan with quarterly payments, $2,000 in interest, for 2 years is: A. 16% B. 7.4% C. 29.5% D. 8.9% AACSB: Analytic Bloom’s: Apply Difficulty: Intermediate […]
Finance Chapter 8 2 Holland Construction Co. has an outstanding 180-day bank loan of $475,000 at an annual
Chapter 08 – Sources of Short-Term Financing 76. Analog Computers needs to borrow $475,000 from the Midland Bank. The bank requires a 15% compensating balance. How much money will Analog need to borrow in order to end up with $475,000 […]
Finance Chapter 8 1 Even during slack loan periods, banks will never loan out money at an interest rate lower than the
Chapter 08 – Sources of Short-Term Financing 1. The largest source of short-term funds for most companies is suppliers (trade credit). TRUE Bloom’s: Understand Difficulty: Basic Learning Objective: 08-01 Trade credit from suppliers is normally the most available form of […]
Finance Chapter 7 3 Assuming that we can earn a 10% return on accounts receivable, which of the following actions
Chapter 07 – Current Asset Management 118. Waldron Inc. is considering selling to a group of new customers that will bring in credit sales of $24,000 with a return on sales of 5%. The only new investment will be in […]
Finance Chapter 7 2 In comparison to securities issued by the U.S. Treasury, securities issued by U.S. government
Chapter 07 – Current Asset Management 75. Some of the services provided around the clock by SWIFT are A. international payments between banks. B. foreign exchange. C. trade finance transactions. D. all of these. Bloom’s: Understand Difficulty: Intermediate Learning Objective: […]
Finance Chapter 7 1 Unfortunately, float is too complicated to be effectively managed through any combination
Chapter 07 – Current Asset Management 1. In the management of cash and marketable securities, the primary concern is profitability. FALSE Bloom’s: Understand Difficulty: Basic Learning Objective: 07-01 Current asset management is an extension of concepts discussed in the previous […]
Finance Chapter 6 3 Which of the following combinations of asset structures and financing patterns is likely to
Chapter 06 – Working Capital and the Financing Decision 106. An aggressive, risk-oriented firm will likely A. borrow long-term and carry low levels of liquidity. B. borrow short-term and carry low levels of liquidity. C. borrow long-term and carry high […]
Finance Chapter 6 2 Assuming level production throughout the year, and assuming receivables are collected in
Chapter 06 – Working Capital and the Financing Decision 75. Assuming level production throughout the year, and assuming receivables are collected in two equal installments over the two months subsequent to the sales period, developing the cash budget requires the […]
Finance Chapter 6 1 The key to current asset planning is the ability of management to forecast sales accurately
Chapter 06 – Working Capital and the Financing Decision 1. The faster a firm’s growth in sales, the more likely it is that an increasing percentage of financing will be internally generated. FALSE Bloom’s: Understand Difficulty: Intermediate Learning Objective: 06-01 […]
Finance Chapter 5 2 Firm A employs a high degree of operating leverage; Firm B takes a more conservative approach
Chapter 05 – Operating and Financial Leverage 63. Cash breakeven analysis A. is helpful in analyzing the short-term outlook of the firm, particularly when it is in trouble financially. B. is important when analyzing long-term profitability. C. includes depreciation expense […]
Finance Chapter 5 1 For firms in industries that offer some degree of stability, are in a positive stage of growth
Chapter 05 – Operating and Financial Leverage 1. Leverage is the use of fixed costs to magnify returns at high levels of operation. TRUE Bloom’s: Understand Difficulty: Basic Learning Objective: 05-01 Leverage represents the use of fixed cost items to […]
Finance Chapter 4 2 Seventy percent of Ellis’ sales are on credit with 60 percent of receivables collected in the
Chapter 04 – Financial Forecasting 61. Wiggles Right forecasted sales of $5,000 in October, $4,000 in November and $4,000 in December. All sales are on credit. 40% is collected the month of sale and the remainder the following month. How […]
Finance Chapter 4 1 The generation of sales and profits ensures that there will be adequate cash on hand to
Chapter 04 – Financial Forecasting 1. An increase in sales and/or profits means there is also an increase in cash on the balance sheet. FALSE Bloom’s: Understand Difficulty: Basic Learning Objective: 04-02 The three financial statements for forecasting are the […]
Finance Chapter 3 1 Profitability ratios allow one to measure the ability of the firm to earn an adequate return
Chapter 03 – Financial Analysis 1. Ratios are used to compare different firms in the same industry. TRUE 3-1 Difficulty: Basic Learning Objective: 03-01 Ratio analysis provides a meaningful comparison of a company to its industry. Chapter 03 – Financial […]
Finance Chapter 3 3 Given the balance sheet and income state for Simmons Maintenance Company, compute the ratios that are also shown for the industry average
Chapter 03 – Financial Analysis 3-41 Chapter 03 – Financial Analysis 106. Refer to the figure above. Compute Marni’s after tax profit margin. A. 7.5% B. 3.75% C. 50% D. None of these. AACSB: Analytic Bloom’s: Apply Difficulty: Intermediate Learning […]
Journalism Chapter 22 3 Personal selling often results in conflicts between sales force and management. Which of the following is the major reason for these conflicts
Chapter 22 – Personal Selling (online) 72. (p. 13–14) Which of the following characteristics of personal selling can be both advantageous and disadvantageous? A. The ability to personalize the sales message B. Lack of distraction C. Cost of selling D. […]
Finance Chapter 3 2 Income can be distorted by factors other than inflation. The most important causes of distortion for inter-industry comparisons are
Chapter 03 – Financial Analysis 66. A firm has total assets of $3,000,000. It has $1,200,000 in long-term debt. The stockholders equity is $1,000,000. What is the debt to total asset ratio? A. 45% B. 75% C. 55% D. 67% […]
Journalism Chapter 22 2 Many organizations analyze their databases to study purchase behavior and frequency and duration of customer interactions.
Chapter 22 – Personal Selling (online) 40. (p. 8) Many organizations analyze their databases to study purchase behavior and frequency and duration of customer interactions. Which of the following is likely to be the reason for this study? A. Evaluation […]
Finance Chapter 2 3 Identify each of the following as increasing (+) or decreasing ( ) cash flows from operating
Chapter 02 – Review of Accounting 116. Hoover Inc. has current assets of $350,000 and fixed assets of $650,000. Current liabilities are $100,000 and long-term liabilities are $250,000. There is $120,000 in preferred stock outstanding and the firm has issued […]
Journalism Chapter 22 1 Management should determine what the specific responsibilities of personal selling will be and what role it will assume relative to the other promotional mix elements
Chapter 22 – Personal Selling (online) 1. (p. 4) Personal selling is typically under the control of the: A. sales manager. B. advertising department. C. promotions department. D. marketing department. E. operations manager. Personal selling is typically under the control […]
Finance Chapter 2 2 A firm has $4,000,000 in its common stock account and $10,000,000 in its paid-in capital
Chapter 02 – Review of Accounting 72. A firm has $4,000,000 in its common stock account and $10,000,000 in its paid-in capital account. The firm issued 1,000,000 shares of common stock. What is the par value of the common stock? […]
Journalism Chapter 21 3 Which of the following alternatives to an advertiser-supported media system would run counter to most Americans’ desire for freedom of the press
Chapter 21 – Evaluating the Social, Ethical, and Economic Aspects of Advertising and Promotion 72. (p. 751) Which of the following alternatives to an advertiser-supported media system would run counter to most Americans’ desire for freedom of the press? A. […]
Finance Chapter 2 1 Equity is a measure of the monetary contributions that have been made directly or indirectly
Chapter 02 – Review of Accounting 1. The income statement is the major device for measuring the profitability of a firm over a period of time. TRUE Bloom’s: Understand Difficulty: Basic Learning Objective: 02-01 The income statement measures profitability. The […]
Journalism Chapter 21 2 Advertising for which of the following product categories is most likely to be criticized for promoting materialistic values
Chapter 21 – Evaluating the Social, Ethical, and Economic Aspects of Advertising and Promotion 40. (p. 742) _____ refers to a personal value orientation that stresses hard work and individual effort and initiative and views the accumulation of material possessions […]
Finance Chapter 1 2 The Sarbanes-Oxley Act set up the Public Company Accounting Oversight Board with the
Chapter 01 – The Goals and Functions of Financial Management 62. Professors Harry Markowitz and William Sharpe received their Nobel prize in economics for their contributions to the A. options pricing model. B. theories of working capital management. C. theories […]
Journalism Chapter 21 1 A lapse in ethical standards or judgment in advertising and promotion can be more damaging to a company than the lapses in other disciplines.
Chapter 21 – Evaluating the Social, Ethical, and Economic Aspects of Advertising and Promotion 1. (p. 731) _____ are moral principles and values that govern the actions and decisions of an individual or group. A. Regulations B. Guidelines C. Policies […]
Finance Chapter 1 1 During the 1930s, financial practice revolved around such topics as the preservation of
Chapter 01 – The Goals and Functions of Financial Management 1. As finance emerged as a new field, much emphasis was placed on mergers and acquisitions. TRUE 1-1 Bloom’s: Remember Difficulty: Basic Learning Objective: 01-01 The field of finance integrates […]
Journalism Chapter 20 3 The origin of the Federal Trade Commission’s corrective advertising program came from a deceptive advertising case involving
Chapter 20 – Regulation of Advertising and Promotion 71. (p. 705) The origin of the Federal Trade Commission’s corrective advertising program came from a deceptive advertising case involving: A. Listerine. B. Ocean Spray Cranberry Juice. C. Campbell Soup. D. STP […]
Journalism Chapter 20 2 A prepackaged milkshake sold in convenience stores advertises that it has more chocolate-taste than shakes purchased at restaurants
Chapter 20 – Regulation of Advertising and Promotion 41. (p. 697) The _____ gave the Federal Trade Commission the power to establish trade regulation rules. A. Magnuson-Moss Act of 1975 B. FTC Act C. Wheeler-Lea Amendment D. Sherman Antitrust Act […]
Journalism Chapter 20 1 A number of self-regulatory mechanisms have been established by the business community in an effort to control advertising practices and among them
Chapter 20 – Regulation of Advertising and Promotion 1. (p. 684) Advertisers are often supportive of voluntary self-regulation because: A. self-regulation is viewed as a way of limiting government interference of advertising. B. all clients and agencies are affected by […]