Which one of the following best states the primary goal of financial management?
Multiple Choice
Minimize operational costs while maximizing firm efficiency
Maximize the current value per share
Correct
Maximize current dividends per share
Maintain steady growth while increasing current profits
Increase cash flow and avoid financial distress
Answer
Maximize the current value per share
Which one of the following terms is defined as the mixture of a firm's debt and equity financing?
Multiple Choice
Working capital management
Capital budgeting
Cash management
Cost analysis
Capital structure
Answer
Capital structure
An example of a capital budgeting decision is deciding:
Multiple Choice
how much money should be kept in the checking account.
whether or not to purchase a new machine for the production line.
Correct
how much inventory to keep on hand.
how to refinance a debt issue that is maturing.
how many shares of stock to issue.
Answer
whether or not to purchase a new machine for the production line.
Which one of the following parties has ultimate control of a corporation?
Multiple Choice
Board of directors
Chairman of the board
Chief operating officer
Chief executive officer
Shareholders
Answer
Shareholders
When evaluating the timing of a project’s projected cash flows, a financial manager is analyzing:
Multiple Choice
when each cash flow is expected to occur.
Correct
only the date of the final cash flow related to the project.
only the start-up costs that are expected to require cash resources.
the amount by which cash receipts are expected to exceed cash outflows.
the amount of each expected cash flow.
Answer
when each cash flow is expected to occur.
Capital structure decisions include determining:
Multiple Choice
how much debt should be assumed to fund a project.Correct
which one of two projects to accept.
how to allocate investment funds to multiple projects.
the amount of funds needed to finance customer purchases of a new product.
how much inventory will be needed to support a project.
Answer
how much debt should be assumed to fund a project.
Financial managers should primarily focus on the interests of:
Multiple Choice
stakeholders.
their immediate supervisor.
the board of directors.
the vice president of finance.
shareholders.
Answer
shareholders.
Which one of the following terms is defined as the management of a firm's long-term investments?
Multiple Choice
Financial allocation
Agency cost analysis
Capital structure
Working capital management
Capital budgeting
Answer
Capital budgeting
Which one of the following questions is a working capital management decision?
Multiple Choice
Should the company issue new shares of stock or borrow money?
How much inventory should be on hand for immediate sale?
Correct
Should the company update or replace its older equipment?
How much should the company borrow to buy a new building?
Should the company close one of its current stores?
Answer
How much inventory should be on hand for immediate sale?
The treasurer of a corporation generally reports directly to the:
Multiple Choice
chairman of the board.
vice president of finance.
Correct
chief executive officer.
board of directors.
president.
Answer
vice president of finance.
Multiple Choice
Minimize operational costs while maximizing firm efficiency
Maximize the current value per share
Correct
Maximize current dividends per share
Maintain steady growth while increasing current profits
Increase cash flow and avoid financial distress
Answer
Maximize the current value per share
Which one of the following terms is defined as the mixture of a firm's debt and equity financing?
Multiple Choice
Working capital management
Capital budgeting
Cash management
Cost analysis
Capital structure
Answer
Capital structure
An example of a capital budgeting decision is deciding:
Multiple Choice
how much money should be kept in the checking account.
whether or not to purchase a new machine for the production line.
Correct
how much inventory to keep on hand.
how to refinance a debt issue that is maturing.
how many shares of stock to issue.
Answer
whether or not to purchase a new machine for the production line.
Which one of the following parties has ultimate control of a corporation?
Multiple Choice
Board of directors
Chairman of the board
Chief operating officer
Chief executive officer
Shareholders
Answer
Shareholders
When evaluating the timing of a project’s projected cash flows, a financial manager is analyzing:
Multiple Choice
when each cash flow is expected to occur.
Correct
only the date of the final cash flow related to the project.
only the start-up costs that are expected to require cash resources.
the amount by which cash receipts are expected to exceed cash outflows.
the amount of each expected cash flow.
Answer
when each cash flow is expected to occur.
Capital structure decisions include determining:
Multiple Choice
how much debt should be assumed to fund a project.Correct
which one of two projects to accept.
how to allocate investment funds to multiple projects.
the amount of funds needed to finance customer purchases of a new product.
how much inventory will be needed to support a project.
Answer
how much debt should be assumed to fund a project.
Financial managers should primarily focus on the interests of:
Multiple Choice
stakeholders.
their immediate supervisor.
the board of directors.
the vice president of finance.
shareholders.
Answer
shareholders.
Which one of the following terms is defined as the management of a firm's long-term investments?
Multiple Choice
Financial allocation
Agency cost analysis
Capital structure
Working capital management
Capital budgeting
Answer
Capital budgeting
Which one of the following questions is a working capital management decision?
Multiple Choice
Should the company issue new shares of stock or borrow money?
How much inventory should be on hand for immediate sale?
Correct
Should the company update or replace its older equipment?
How much should the company borrow to buy a new building?
Should the company close one of its current stores?
Answer
How much inventory should be on hand for immediate sale?
The treasurer of a corporation generally reports directly to the:
Multiple Choice
chairman of the board.
vice president of finance.
Correct
chief executive officer.
board of directors.
president.
Answer
vice president of finance.
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