Financial Management

131. The main focus of a stock-for-stock exchange is on:

  1. the earnings per share impact of the exchange
  2. the capital budgeting implications
  3. the shareholders of the acquired firms
  4. the growth opportunities
Correct answer: (A)
the earnings per share impact of the exchange

132. On the books of the acquiring firm, a merger may be treated as:

  1. a cash purchase or a pooling of interests
  2. a stock-for-stock exchange
  3. a purchase of assets
  4. a pooling of interests or a purchase of assets
Correct answer: (D)
a pooling of interests or a purchase of assets

133. Fundamental factors influencing exchange rates include:

  1. inflation, government policies, translation exposure
  2. interest rates, government policies, and expropriation
  3. balance of payments, spot rates, and expropriation
  4. government policies, balance of payments, inflation
Correct answer: (D)
government policies, balance of payments, inflation

134. Foreign exchange risk may be best defined as:

  1. the chance of value change in foreign exchange rates
  2. the chance that the demand for your currency will drop
  3. the chance that exchange rates will be fixed
  4. the political risk posed by foreign governments
Correct answer: (A)
the chance of value change in foreign exchange rates

135. Which of the following are not among the daily activities of financial management?

  1. sale of stocks and bonds
  2. credit management
  3. inventory control
  4. the receipt and disbursement of funds
Correct answer: (A)
sale of stocks and bonds

136. The mix of debt and equity in a firm is referred to as the firm's:

  1. primary capital
  2. capital composition
  3. cost of capital
  4. capital structure
Correct answer: (D)
capital structure

137. All of the following are decisions heavily impacted by federal income tax considerations except:

  1. lease versus purchase decisions
  2. the issuance of common shares versus debt
  3. cash budgeting and dividend policy decisions
  4. the decision to replace on asset
Correct answer: (C)
cash budgeting and dividend policy decisions

138. Debt utilization ratios measure:

  1. the speed at which the firm is turning over its assets
  2. the ability of the firm to earn an adequate return on sales, total assets, and invested capital
  3. the firm's ability to pay off short term obligations as they are due
  4. the debt position of the firm in light of its assets and earning power
Correct answer: (D)
the debt position of the firm in light of its assets and earning power

139. Analyzing the performance of the firm through ratios over a number of years is referred to as:

  1. financial analysis
  2. ratio analysis
  3. trend analysis
  4. operations analysis
Correct answer: (C)
trend analysis

140. In order to determine cash receipts, the financial manager must know:

  1. projected sales and the collection pattern
  2. projected sales and the profit margin
  3. gross profit and the collection pattern
  4. gross profit and taxes
Correct answer: (A)
projected sales and the collection pattern
Previous
Page 14 of 78
Next