BUSN 21ST CENTURY 2ND EXAM C9 & C10
QUESTIONS AND ANSWERS 100% PASS
What is the amount of money that, if invested today at a given rate of interest, would grow to become
some future amount in a specified number of time periods? - correct answer-net present value
Paley, a skincare company, imports its raw materials from different countries. To cover the cost of expe
nsive raw materials, Paley takes a yearly loan of $10 million from Herring Jones, a finance company. Th
e remaining budget is covered by the company itself. The given scenario indicates that the firm most li
kely relies on measuring to decide how it finances its overall operations and growth by using dif
ferent sources of funds. - correct answer-leverage ratios
Yamin works for ElecTro Inc. Her primary responsibilities include managing the firm's working capital a
nd analyzing long-
term investment opportunities for the firm. Yamin is most likely a part of the firm's team. -
correct answer-financial management
One drawback of offering liberal credit to customers is that it can . - correct answer-
delay the receipt of cash that the firm needs to meet its financial obligations
Gotwing Inc., a multinational company, issues promissory notes to big corporations. As the company h
as strong credit ratings, it easily finds buyers without having to offer a substantial discount for its debt.
Which of the following short-
term financing options is being used by Gotwing Inc. in the given scenario? - correct answer-
Commercial paper
The main disadvantage of financial leverage is that . - correct answer-
the cost of debt financing is now high
The main advantage of financial leverage is that . - correct answer-
it magnifies the financial return on the investment of stockholders when times are good
Rather than borrow from banks or other lenders, corporations sometimes issue their own formal IOUs,
called . - correct answer-corporate bonds
, A firm's refers to its holdings of currency plus demand deposits. - correct answer-cash
forecasts the types and amounts of assets a firm will need to implement its future plans, and it
helps financial managers determine the amount of additional financing the firm must arrange in order
to acquire those assets. - correct answer-The budgeted balance sheet
In finance, what type of asset can be quickly converted into cash with little risk of loss? -
correct answer-Liquid assests
Gaetano, a luxury home company, wants to hire architects to create a new home design. To obtain fun
ds for the project, Gaetano issues several formal IOUs to sell to investors, with a maturation period of
12 years. Which of the following sources of long-
term funds is being used by Gaetano in the given scenario? - correct answer-corporate bonds
The following questions must be answered when setting credit terms: How long should the firm exten
d credit? What type of cash discount should the firm offer to encourage early payments? -
correct answer-true
The extent to which retained earnings are used as a source of long-
term capital for a firm, depends on the state of the economy. - correct answer-true
Accounts receivable represents what customers who buy on credit owe the firm. - correct answer-true
National Association of Securities Dealers Automated Quotation System (NASDAQ) started as a physical
location where brokers met to buy and sell stocks for their clients. - correct answer-false
Institutional investors amass large pools of financial capital by accepting savings account deposits. -
correct answer-false
A sell limit order tells a broker to sell the shares only if the price is at or above a specified value. -
correct answer-true
QUESTIONS AND ANSWERS 100% PASS
What is the amount of money that, if invested today at a given rate of interest, would grow to become
some future amount in a specified number of time periods? - correct answer-net present value
Paley, a skincare company, imports its raw materials from different countries. To cover the cost of expe
nsive raw materials, Paley takes a yearly loan of $10 million from Herring Jones, a finance company. Th
e remaining budget is covered by the company itself. The given scenario indicates that the firm most li
kely relies on measuring to decide how it finances its overall operations and growth by using dif
ferent sources of funds. - correct answer-leverage ratios
Yamin works for ElecTro Inc. Her primary responsibilities include managing the firm's working capital a
nd analyzing long-
term investment opportunities for the firm. Yamin is most likely a part of the firm's team. -
correct answer-financial management
One drawback of offering liberal credit to customers is that it can . - correct answer-
delay the receipt of cash that the firm needs to meet its financial obligations
Gotwing Inc., a multinational company, issues promissory notes to big corporations. As the company h
as strong credit ratings, it easily finds buyers without having to offer a substantial discount for its debt.
Which of the following short-
term financing options is being used by Gotwing Inc. in the given scenario? - correct answer-
Commercial paper
The main disadvantage of financial leverage is that . - correct answer-
the cost of debt financing is now high
The main advantage of financial leverage is that . - correct answer-
it magnifies the financial return on the investment of stockholders when times are good
Rather than borrow from banks or other lenders, corporations sometimes issue their own formal IOUs,
called . - correct answer-corporate bonds
, A firm's refers to its holdings of currency plus demand deposits. - correct answer-cash
forecasts the types and amounts of assets a firm will need to implement its future plans, and it
helps financial managers determine the amount of additional financing the firm must arrange in order
to acquire those assets. - correct answer-The budgeted balance sheet
In finance, what type of asset can be quickly converted into cash with little risk of loss? -
correct answer-Liquid assests
Gaetano, a luxury home company, wants to hire architects to create a new home design. To obtain fun
ds for the project, Gaetano issues several formal IOUs to sell to investors, with a maturation period of
12 years. Which of the following sources of long-
term funds is being used by Gaetano in the given scenario? - correct answer-corporate bonds
The following questions must be answered when setting credit terms: How long should the firm exten
d credit? What type of cash discount should the firm offer to encourage early payments? -
correct answer-true
The extent to which retained earnings are used as a source of long-
term capital for a firm, depends on the state of the economy. - correct answer-true
Accounts receivable represents what customers who buy on credit owe the firm. - correct answer-true
National Association of Securities Dealers Automated Quotation System (NASDAQ) started as a physical
location where brokers met to buy and sell stocks for their clients. - correct answer-false
Institutional investors amass large pools of financial capital by accepting savings account deposits. -
correct answer-false
A sell limit order tells a broker to sell the shares only if the price is at or above a specified value. -
correct answer-true
