Introduction To Financial Management

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Question 1

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The increase in oil production in the United States characterizes which of the following key financial concepts presented in this book?

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the Rule of 72

time value of money

risk and return

capital budgeting

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Question 2

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Which of the following is not an impact of the slowdown occurring in China's economy?

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lower demand in materials such as steel, iron ore, and copper

real estate market declining in Sydney, Australia

money going out of Manhattan, New York

falling community prices

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Question 3

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Not all cash a company generates will be returned to the investors. Which of the following will NOT reduce the amount of capital returned to the investors?

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retained earnings

taxes

dividends

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Question 4

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This subarea of finance involves methods and techniques to make appropriate decisions about what kinds of securities to own, which firms' securities to buy, and how to be paid back in the form that the investor wishes.

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real markets

investments

financial management

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Question 5

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This subarea of finance looks at firm decisions in acquiring and utilizing cash received from investors or from retained earnings.

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investments

financial management

treasury management

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Question 6

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Financial management involves decisions about which of the following?

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which projects to fund

how to minimize taxation

what type of capital should be raised

all of these choices are correct.

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Question 7

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This subarea of finance helps facilitate the capital flows between investors and companies.

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investments

financial management

treasury management

financial institutions and markets

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Question 8

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This subarea of finance is important for adapting to the global economy.

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investments

financial management

international finance

financial institutions and markets

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Question 9

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A potential future negative impact to value and/or cash flows is often discussed in terms of probability of loss and the expected magnitude of the loss. This is called

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options.

standard deviation.

coefficient of variation.

risk.

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Question 10

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This is a general term for securities like stocks, bonds, and other assets that represent ownership in a cash flow.

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investment

financial asset

real asset

financial markets

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Question 11

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Which of the following is defined as a group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations?

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investments

asset classes

market instruments

financial markets

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Question 12

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The most commonly accepted groups of asset classes include all of the following except

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stocks.

bonds.

machinery and equipment.

real estate.

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Question 13

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Which of the following is the firm's highest-level financial manager?

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chief executive officer

chief financial officer

board of directors

corporate governance

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Question 14

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Which of the following managers would NOT use finance?

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operational managers

marketing managers

human resource managers

all of these choices are correct.

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Question 15

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Which of the following personal decisions is NOT impacted by finance?

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borrowing money to purchase cars or homes

making credit card payments

making retirement decisions

all of these choices are correct.

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Question 16

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When determining a form of business organization, all of the following are considered EXCEPT

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who owns the firm.

the owners' risks.

the tax ramifications.

the physical location of the business.

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Question 17

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This type of business organization is relatively easy to start, and it is subject to much lighter regulatory and paperwork burden than other business forms.

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sole proprietorship

partnership

corporation

hybrid organization

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Question 18

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This type of business organization is entirely legally independent from its owners.

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sole proprietorship

partnership

public corporations

hybrid organizations

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Question 19

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Which of the following is NOT considered a hybrid organization?

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S corporation

limited liability partnership

limited liability company

limited partnership

all of these choices are correct.

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Question 20

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The practice generally known as double taxation is due to

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shareholders' dividends being taxed at both the federal and state levels.

corporate income being taxed at both the federal and state levels.

interest on shareholders' dividends being taxed as income.

corporate incomes being taxed at the corporate level, then again at the shareholder level when corporate profits are paid out as dividends.

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