Business 001 - Introduction to Business » Spring 2022 » Ch 16 OpenStax Homework
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Question #1
Making sure that enough cash is on hand to pay bills as they come due and to meet unexpected expenses is called cash:
A.
administration
B.
management
C.
maintenance
D.
capitalization
E.
targeting
Question #2
Chez Dove is an independent coffeehouse/bookstore that went bankrupt only eight months after opening due to an unexpected demand for cash to fix a leaking roof. Better cash _____ might have allowed the business to continue operation.
A.
targeting
B.
management
C.
capitalization
D.
administration
E.
maintenance
Question #3
Financial managers often shift temporary funds from checking accounts to _____ securities to earn higher interest returns.
A.
operational
B.
commercial
C.
administrative
D.
strategic
E.
marketable
Question #4
Short-term investments that are easily converted back to cash and are used by financial managers to achieve higher returns than those offered by checking accounts are:
A.
corporate securities
B.
corporate equities
C.
negotiable securities
D.
marketable credits
E.
management vehicles
Question #5
_____ is a short-term unsecured debt issued by a financially strong corporation.
A.
A treasury bill
B.
A money market deposit
C.
Commercial paper
D.
Investment credit
E.
A certificate of deposit
Question #6
Commercial paper is:
A.
the same thing as accounts receivable recorded in the ledger
B.
a type of IOU
C.
a type of secured debt
D.
typically issued by stakeholders
E.
accurately described by none of the above
Question #7
The three most popular types of marketable securities are Treasury bills, certificates of deposit, and:
A.
checking accounts
B.
commercial paper
C.
Treasury notes
D.
corporate bonds
E.
money market funds
Question #8
Grainger Distribution Company sold Long Electronics ten circuit breakers for $179.00 each. Long Electronics will be allowed thirty days to pay the bill. Grainger will carry the $1790.00 on its books as a(n):
A.
fixed liability
B.
current liability
C.
marketable security
D.
account payable
E.
account receivable
Question #9
_____ are specific repayment conditions as to how long customers have to pay bills and the amount of cash discount allowed.
A.
Credit credentials
B.
Sales terms
C.
Liability procedures
D.
Credit terms
E.
Revolving accounts
Question #10
The cost of inventory to the firm includes all of the following EXCEPT:
A.
purchase price
B.
handling costs
C.
ordering costs
D.
insurance costs
E.
selling costs
Question #11
Funds invested in long-lived assets, such as land, buildings, machinery, and equipment, are called:
A.
material costs
B.
capital expenditures
C.
production costs
D.
manufacturing expenses
E.
operating expenses
Question #12
As the Toronto-based Four Seasons hotel chain remodels an existing hotel in Mumbai to bring it to the five-star hotel’s exacting standards, it is building a magnificent revolving restaurant overlooking the Arabian Sea at World. The restaurant structure is an example of a(n):
A.
capital expenditure
B.
operating cost
C.
intangible asset
D.
material cost
E.
account receivable
Question #13
Which of the following would be an example of a capital expenditure for a superstore that specializes in outdoor grills and other items needed for outside dining?
A.
pens and markers
B.
order forms
C.
a handheld calculator
D.
a parking lot
E.
cardboard sale signs
Question #14
_____ is the process of selecting the capital expenditures that offer the best returns and meet the goal of maximizing the firm's value.
A.
Capital evaluation
B.
Budget allocation
C.
Capital allocation
D.
Budget analysis
E.
Capital budgeting
Question #15
Capital budgeting:
A.
combines all budgets into a master budget
B.
analyzes production costs
C.
selects asset proposals for maximum profitability
D.
helps select new products
E.
allows managers to analyze profit and loss statements
Question #16
Short-term loans:
A.
are always secured
B.
are shown as a capital expenditure on the balance sheet
C.
are shown as a current liability on the balance sheet
D.
have a maturity of one year or longer
E.
do not require any collateral
Question #17
The three main types of unsecured short-term loans are:
A.
commercial paper, accounts payable, and trade credit
B.
accounts payable, notes payable, and loans payable
C.
trade credit, bank loans, and commercial paper
D.
treasury bills, certificates of deposit, and accounts payable
E.
trade credit, accounts payable, and bank loans
Question #18
When Magna Manufacturing sells hand on screwdriver sets to Malloy Building Supply Company, Magna bills the tool manufacturer for the screwdriver purchase with terms of payment, which specify when the account is due. This type of unsecured loan is called _____ credit.
A.
revolving
B.
borrower's
C.
product
D.
factored
E.
trade
Question #19
A(n) _____ is a type of loan often used to finance buildup of inventory for seasonal (cyclical) businesses just before their strongest sales period.
A.
unsecured bank loan
B.
commercial paper loan
C.
secured bank loan
D.
collateral loan
E.
trade credit
Question #20
Which of the following businesses would be most likely to require an unsecured bank loan, such as a line of credit or a revolving credit agreement?
A.
a manufacturer of health and beauty aids
B.
an envelope manufacturer
C.
a manufacturer of integrated circuits
D.
a Christmas tree farm
E.
a poultry producer
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