Certificate of deposit is an interest-earning deposit that requires the funds to remain deposited for a fixed term.

Projects with potential for high returns generally have a low degree of uncertainty and risk.

A budgeted income statement is a projected financial statement that forecasts the types and amounts of assets a firm will need to implement its future plans and how the firm will finance those assets.

In the context of accounting for the time value of money, discount rate remains constant in a specified number of time periods.

Benny-Duke Inc. reported a net income of $7 million but paid no dividends to its shareholders. The shareholders should sue the company for failure to provide a return on their equity investment.

Accounts receivable represents what customers who buy on credit owe the firm.

Lean inventory policies can be ineffective in a firm, although they do not leave the firm vulnerable to supply disruptions.

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.

Cash budgets normally cover a one-year period and show projected cash inflows and outflows for each month.

When conflicts arise between the long-term interests of owners and those of other stakeholders, the fiduciary duty required of financial managers generally leads them to make decisions that are most consistent with the interests of ownership.

 Financial managers should focus solely on meeting the financial needs of their firms in the short run, leaving the long-term financial issues to the top management.

The current ratio is calculated by dividing a firm's current liabilities by its total assets.

Term loans issued by commercial banks are popularly used by financial institutions and large corporations because they typically carry lower interest rates than commercial paper.

A manufacturing firm does not necessarily need an inventory of parts and materials to assemble its products.

A factor is a restriction lenders impose on borrowers as a condition of providing long-term debt financing.

A disadvantage of debt financing is that creditors often impose covenants on the borrower.

The following questions must be answered when setting credit terms: How long should the firm extend credit? What type of cash discount should the firm offer to encourage early payments?

Because it is normally unsecured, commercial paper is only offered by firms with no credit ratings.

If an invoice lists the terms of trade credit as 2/10 net 30, it means that the supplier is offering a 10 percent cash discount off the invoice price if the buyer pays within 2 days.

A budgeted income statement is a detailed forecast of future cash flows that helps financial managers identify when their firm is likely to experience temporary shortages or surpluses of cash.

Money market mutual funds raise money by selling shares to large numbers of investors.

David needs to acquire financial capital to purchase a printing press for his business. David can either acquire the financial capital for the press by borrowing money from a bank or by purchasing the press on credit from his supplier.

Return-on-equity indicates how much net income a firm earned per share of common stock outstanding.

Commercial paper, which is sometimes issued for as little as two days, can be issued for up to 270 days.

A commitment to meeting social responsibilities can contribute to a more profitable company and an increase in shareholder value.

Which of the following statements is true of angel investors?

Which of the following statements is true of commercial paper?

Trumen House, a confectionary manufacturing company, orders its raw materials in bulk from Nesinbon. Nesinbon allows Trumen House to make the payment at a later date, as opposed to immediate payment. Which of the following short-term financing options is being offered by Nesinbon?

 Yennex Inc., a textile company, planned to sell its stock products in two months' time. The company was able to sell those products within a month's time. Therefore, it was able to sell double the estimated amount in a year. Given the scenario, which of the following ratio analyses is most likely to have been analyzed by Yennex Inc. to achieve this success?

Alpha Inc. saw an increase in profits in the previous year following which the management decided to reinvest its earnings. These retained earnings will be used to:

MVJ Corp., a market research firm, borrowed $2 million from Trimitium Bank. While negotiating with the bank, the firm signs a promissory note, which specifies that the firm must pay the borrowed amount in 90 days with interest. However, the bank also requires the firm's inventories and receivables to be pledged as collateral to back the loan. Which of the following short-term financing options is being offered by Trimitium Bank in the given scenario?

The _____ is an asset management ratio that measures how quickly a firm sells its stock to generate revenue.

Newot Texin, a pharmaceutical company, introduces a new pain relieving drug in the market. It borrows $1 million from Esterotia, a private bank, to market the drug. In return, Esterotia allows Newot Texin to return the full amount with interest in fixed amounts of $200,000 every six months. Which of the following sources of long-term funds is being used by Newot Texin in the given scenario?

 Vironi Mave, a designer clothing company, wants to hire fashion designers to start a new clothing line for men. To obtain funds for the project, Vironi Mave issues several formal IOUs to sell them to its investors, with a maturation period of ten years. Which of the following sources of long-term funds is being used by Vironi Mave in the given scenario?

Connink, a software development firm, invested on developing new products from the company's earnings from the previous year. Which of the following sources of long-term funds is being used by Connink in the given scenario?

An advantage of factoring is that:

Yellow Dustur, a textile company, converts its overseas assets into cash in order to pay its debts to different companies the following year. In the given scenario, which of the following financial ratios is most likely being analyzed by Yellow Dustur?

In the context of short-term financing, which of the following statements is true of a factor?

_____ measure how effectively an organization uses its resources to generate net income.

The term _____ refers to the use of debt to meet a firm's funding needs.

In finance, a _____ is one that can be quickly converted into cash with little risk of loss.

A _____ can help a firm evaluate how much internal financing (funds generated by earnings) will be available for a planning period.

_____ compares assets that will provide cash in the following year to debts that will come due in the following year.

An advantage of debt financing is that:

Financial managers evaluate a firm's current strengths and weaknesses by computing ratios that compare values of key accounts listed on their firm's:

Hevron Hrist, a multinational company, finances itself each year by procuring 25 percent of its yearly budget through loans from banks. The remaining budget is covered by the company itself. The given scenario suggests that the firm most likely relies on measuring _____ to decide its capital structure.

Which of the following statements best describes a money market mutual fund?

_____ helps financial managers determine the amount of additional financing a firm must arrange to acquire the assets needed to implement its future plans.

Kitsure, a cosmetics company, was able to sell 20 percent more than its estimated sales in a year. The company was able to acquire its investment along with a higher turnover for its shareholders. Which of the following financial ratios provides the measure of Kitsure's earnings?