Financial Management

The objectives or goals of financial management are to maximize …………..?

• Sales

• Profits

• Owner's wealth

• Total assets

Which one is classified as ‘Assets’?

• Accounts payable

• Common stock

• Bonds

• Inventories

Answer explanation

Accounts payable and bonds are liabilities.

Common stock is owner's equity.

What institution has authority to increase/reduce interest rate?

• Commercial banks

• Central bank

• Savings and loan associations

• Credit unions

Answer explanation

Central bank is the bank of a country that manages the currency and monetary policy.

……. is used to estimate future free cash flows.

• Mission statement

• Projected financial statement

• Vision

• Objectives

What is not the main reason that companies go “global”?

• To seek raw materials

• To diversify

• To narrowed their markets

• To avoid political hurdles

Answer explanation

The choice must be ...

To expand their markets.

Which statement is not basic financial report?

• Outcome statement

• Income statement

• Balance Sheet

• Cash flow statement

What is a bond?

• A long-term debt

• A short-term investment

• A long-term assets

• A short-term assets

The stocks that are owned by investors who are not active in management are called ……?

• Common stock

• Classified stock

• Closely held stock

• Publicly held stock

Which one is not the four factors influencing capital structure decisions?

• The firm’s tax position

• Government policies

• Business risk

• Financial flexibility

Securities whose values are determined by the market price or interest rate of some other asset is called …….?

• Hedging

• Equities

• Derivatives

• Liabilities