Financial Management quizlet second set

What is the cash cycle?

• a. The speed of collecting cash from customers

• b. The amount of cash kept in banks

• c. The comparison of debt to cash

• d.The amount of time to regenerate cash      

Why is float important to understand?

• a. To know how to keep the company profitable

• b. To know why the company needs cash

• c. To determine when to buy fixed assets

• d. To time cash expenditures

• e. None of the above  

What should a company do to manage its working capital?

• a. Collect quickly and pay slowly

• b. Keep a large cash balance

• c. Maximize the use of long term investment

• d. Depreciate assets more slowly      

What would be a source of information to determine Replacement Cost?

• a. Building Appraisal

• b. Accumulated Depreciation Expense

• c. Stock price

• d. Statement of Cash Flows   

What does the Sarbanes-Oxley Act require companies to do?

• a. Have a board of directors

• b. Register all foreign sales

• c. Make estimated tax payments

• d. Have internal control audits          

FINRA (Financial Industry Regulatory Authority) does the following: (pick one)

• a. No foreign bribery by corporations

• b. Regulates bond prices

• c. Establishes Credit Unions

• d. Prosecutes naughty stock brokers

• e. Regulates Hedge Funds     

If a product is made 100% domestically, what can affect its domestic market?

• a. International exchange rates

• b. International competition

• c. Product tariffs

• d. International political regulations 

If a company makes its product in a foreign country where labor costs are much lower, what happens?

• a. Profits and domestic employment goes up

• b. Costs go up and domestic employment goes down

• c. Costs stay the same and domestic employment increases

• d. Profits go up and domestic employment decreases.         

If the value of a dollar increases, the price of imports:

• a. Increases

• b. Decreases

• c. Stays the same

• d. Fluctuates  

Why would a farmer buy a hedge when he signs a contract to sell produce overseas?

• a. To avoid tariffs

• b. To reduce currency risk

• c. To increase profits

• d. To avoid competition