1. Which one of the following is a capital structure decision? Multiple Choice

Determining when suppliers should be paid

Establishing the preferred debt-equity level

Determining the optimal inventory level

Setting the terms of sale for credit sales

Selecting new equipment to purchase

2. Capital budgeting includes the evaluation of which of the following?

Multiple Choice

Size, timing, and risk of future cash flows

Size and timing of future cash flows only

Timing and risk of future cash flows only

Size of future cash flows only

Risk and size of future cash flows only

3. The daily financial operations of a firm are primarily controlled by managing the:

Multiple Choice

capital structure.

long-term liabilities.

working capital.

capital budget.

total debt level.

4. Which one of the following occupations best fits into the corporate area of finance?

Multiple Choice

Chief financial officer

Local bank manager

Insurance risk manager

Treasury bill analyst

Mortgage broker

5.The primary goal of financial management is to maximize:

Multiple Choice

current profits.

market share.

revenue growth.

the market value of existing stock.

current dividends.

6.Which one of the following functions is generally a responsibility assigned to the corporate treasurer?

Multiple Choice

Capital expenditures

Corporate taxes

Data processing

Financial accounting

Cost accounting

7.The goal of financial management is to increase the:

Multiple Choice

book value of equity.

dividends paid per share.

current market value per share.

future value of the firm's total equity.

number of shares outstanding.

8. Which one of the following is a working capital decision?

Multiple Choice

What is the cost of debt financing?

Should the firm borrow money for five or for ten years?

What debt-equity ratio is best suited to the firm?

How much cash should the firm keep in reserve?

How should the firm raise additional capital to fund its expansion?

9.The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?

Multiple Choice

Structural

Agency

Territorial

Formative

Organizational

10.Jenna has been promoted and is now in charge of all external financing. In other words, she is in charge of:

Multiple Choice

asset allocation.

risk management.

working capital management.

capital budgeting.

capital structure management.