1. According to the forecasting and control function, if a firm cannot obtain the funds required to meet the sales forecast, then it should _____.

A.

plan for the acquisition of required funds well in advance

B.

scale back the projected level of operations

C.

expand its production facilities

D.

build up its inventory quickly

E.

reformulate its plans to increase retained earnings

Question 2

Which of the following is minimized when a company uses the economic order quantity (EOQ) model?

Selected Answer:

A.

Outsourcing

B.

Total inventory cost

C.

Purchase price

D.

Safety stock

E.

Quantity discount

Question 3

Which of the following statements is true of U.S. firms, financial institutions, and banking organizations?

Selected Answer:

A.

U.S. firms had much higher growth rates than their European counterparts.

B.

U.S. firms follow less conservative working capital policies than European firms.

C.

Corporations in the U.S. use significantly greater proportions of long-term financing than European firms.

D.

U.S. financial institutions traditionally have been subject to less restrictions and regulations than banking organizations in other countries.

E.

U.S. banking organizations often have very close relationships with the firms that borrow from them, which generally results in a greater willingness to provide more short-term, risky debt than we observe in European banks.

Question 4

Which of the following inventory management techniques gives the optimal amount of inventory to be purchased?

Selected Answer:

A.

Economic order quantity model

B.

Lockbox system

C.

Payables system

D.

Outsourcing arrangement

E.

Quantity discount model

Question 5

At the financial control phase, a firm is concerned with:

A.

the amount of funds generated internally.

B.

determining how much money it will need during a given period.

C.

determining its financial breakeven point.

D.

the degree of financial leverage that is acceptable.

E.

implementing financial plans and dealing with feedback.

Question 6

_____ are the products that are ready for sale.

A.

Reorder stock

B.

Safety stock

C.

Raw materials

D.

Work-in-process

E.

Finished goods