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Exam Spring 2020, questions and answers
Intro to Business in Societ (Memorial University of Newfoundland)
Studocu is not sponsored or endorsed by any college or university
Exam Spring 2020, questions and answers
Intro to Business in Societ (Memorial University of Newfoundland)
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Chapter 15 Financial Decisions and Risk Management
15.1 Multple-Choice Questons
1) The business actvity that is concerned with determining a frm's long-term investments, obtaining the
funds to pay for those investments, and conductng the frm's everyday fnancial actvites is
A) bookkeeping.
B) corporate fnance.
C) investment brokers.
D) chartered banks.
E) money markets.
Answer: B
Dif: 2 Type: MC Page Ref: 367
Skill: Knowledge
Objectve: 15.1
2) Which of the following represents the overall objectve of fnancial managers?
A) To ensure that the company has enough funds on hand to purchase materials needed to produce goods and services
B) To ensure that the company has enough money to pay for its debts
C) To increase the supply of money for the economy
D) To increase the value of the frm and thus to increase shareholder wealth
E) To manage the frm's cash fow
Answer: D
Dif: 2 Type: MC Page Ref: 367
Skill: Knowledge
Objectve: 15.1
3) When a frm ensures that it always has enough funds on hand to purchase the materials and human resources that it needs to produce goods and services, it is exercising
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A) cash fow management.
B) government tax reportng.
C) accountng.
D) fnancial planning.
E) fnancial control.
Answer: A
Dif: 2 Type: MC Page Ref: 368
Skill: Knowledge
Objectve: 15.1
4) All of the following are responsibilites of the fnancial manager except
A) determining a frm's long-term investments.
B) obtaining funds to pay for those investments.
C) developing the frm's fnancial statements.
D) conductng the frm's everyday fnancial actvites.
E) managing the risks that the frm takes.
Answer: C
Dif: 1 Type: MC Page Ref: 367-368
Skill: Comprehension
Objectve: 15.1
5) Which of the following is correct with respect to chief fnancial ofcers (CFOs)?
A) About 50 percent of CEOs were formerly CFOs.
B) CFOs do much more than simply focus on fnancial documents.
C) In recent years, fewer CFOs have been appointed as chief executves ofcers (CEOs).
D) The skill set of CFOs is narrowing because they have to sharpen their focus on fnancial issues.
E) All of these are correct.
Answer: B
Dif: 1 Type: MC Page Ref: 367
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Skill: Comprehension
Objectve: 15.1
6) Tony is responsible for planning and controlling the acquisiton and dispersal of the company's fnancial assets. What is Tony's job ttle?
A) Management informaton systems manager
B) Financial manager
C) Purchasing manager
D) Accountng manager
E) Chief risk manager
Answer: B
Dif: 1 Type: MC Page Ref: 367
Skill: Comprehension
Objectve: 15.1
7) In 2012, Canadian Pacifc Railway Ltd. announced that it would make investments totaling $1.2 billion in order to improve its operatng rato, which in 2011 was the worst among North America's Big Six railways. This actvity is CPR's
A) cash fow management plan.
B) fnancial plan.
C) leveraging.
D) budget.
E) fnancial control.
Answer: B
Dif: 1 Type: MC Page Ref: 368
Skill: Comprehension
Objectve: 15.1
8) The three basic areas of responsibility for fnancial managers are
A) cash fow management, fnancial control, and fnancial planning.
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B) risk management, portolio diversifcaton, and cash fow management.
C) credit policy, cash fow management, and policy decisions on equity vs. debt fnancing.
D) short-term, medium-term, and long-term fnancing.
E) none of these.
Answer: A
Dif: 1 Type: MC Page Ref: 368
Skill: Comprehension
Objectve: 15.1
9) The "measuring stck" against which performance is evaluated is provided by
A) a budget.
B) a cash fow statement.
C) a fnancial plan.
D) a balance sheet.
E) debt levels.
Answer: A
Dif: 1 Type: MC Page Ref: 368
Skill: Knowledge
Objectve: 15.1
10) Henry has received notce from a supplier that all invoices must be paid within 30 days rather than 60 days as previously given. Which of the following will be impacted by this change?
A) Inventories
B) Raw materials inventory
C) Accounts receivable
D) Capital expenditures
E) Cash fow
Answer: E
Dif: 2 Type: MC Page Ref: 368
Skill: Comprehension
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Objectve: 15.2
11) When managers at Kraf Foods antcipate how much cheddar cheese Safeway supermarkets will buy each month and when Safeway will pay for those purchases, Kraf is managing its
A) accounts payable.
B) accounts receivable.
C) credit policies.
D) capital expenditures.
E) inventories.
Answer: B
Dif: 1 Type: MC Page Ref: 369
Skill: Comprehension
Objectve: 15.2
12) David is looking at a bill for supplies his company bought. It is dated May 1st and the terms are 2/10; net 30. In order to pay the least amount, when should he pay the bill?
A) Any day in May
B) May 10
C) May 21
D) May 31
E) May 15
Answer: B
Dif: 2 Type: MC Page Ref: 369
Skill: Applicaton
Objectve: 15.2
13) Which of the following terms would a frm use to speed up cash fow?
A) 1/10; net 60
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