Financial Management

Why are American regulators focused on international investing in a global marketplace?

• Because international investing in a global marketplace is the concern of American investors

• Because an exclusively domestically focused regulatory approach is still effective

• Because weaving international concerns into domestic policy is cost-effective

• Because other jurisdictions have the same priorities and solutions as the United States

What are the likeliest outcomes if a company outsources the manufacturing of its products to a foreign country?

• Consumer prices will decrease.

• Tariffs will decrease.

• Domestic wages will increase.

• Production capacity will decrease.

• Domestic employment will decrease.

How can a private firm appropriately maximize shareholder value?

• By increasing the firm’s stock price

• By reducing the firm's labor

• By making decisions that keep the control of the business with the owners

What is one of the two basic types of financial instruments?

• Checking accounts

• Bonds

• Euros

• Hedge funds

A company reported an increase in accounts receivable of $5,000 during the recent period. Half of this amount is expected to be collected next period.

How will this change in accounts receivable affect the cash flows from the operating activities section?

• The change will decrease cash flows from operations by $2,500

• The change will decrease cash flows from operations by $2,500.The change will increase cash flows from operations by $2,500

• The change will increase cash flows from operations by $5,000.

• The change will decrease cash flows from operations by $5,000.

What is this firm’s cash flow from investments, using the data above and assuming no asset disposals?

• $5,000 inflow

• $5,000 outflow

• $5,300 inflow

• $5,300 outflow

What do cash flows from investing activities generally relate to?

• A firm’s debt and equity transactions

• A firm’s purchase and sale of long-term assets

• A firm’s sale of goods and services

• A firm’s non-cash transactions

Which transaction is reflected in cash flow from operating activities?

• Amortization expense

• Gain or loss on the sale of property, plant, and equipment

• Credit sales to customers

• Cash sales to customers

What does free cash flow represent?

• Cash flows from operating activities

• Cash balance at the end of the period

• Cash available for distribution after funding required reinvestment

• Cash available for dividends

What do the content and structure of a balance sheet report?

• The gains and losses at a point in time

• The revenues and expenses for a period of time

• The assets, liabilities, and equity at a point in time

• The expenses, assets, and liabilities for a period in time