Financial Planning Quiz

What perspective of financial planning that covers the coming 2 to 5 years.

• Short-run Planning

• Long-run Planning

• Short term planning

• Long-term planning

CVP analysis focuses on how profits are affected by all of the following except:

• Selling Price

• Sales Volume

• Unit Variable Costs

• Operating Income

It represents the use of fixed cost items to magnify the firm’s results.

• Leverage

• Beverage

• Iceage

• Shortage

It establishes guidelines for change and growth in a firm, which are concerned with the major elements of a firm's financial and investment policies.

• Financial Management

• Financial Planning

• Financial Statement

• Financial Leverage

This is the percentage of contribution margin to total sales. Its purpose is very useful as it shows how the contribution margin will be affected by a given peso change in total sales.

• Contribution Margin

• Contribution Rate

• Contribution Margin per unit

• Contribution Margin Ratio

I. Financial managers need to know the costs that are likely to be incurred under normal operating conditions and how they might vary if conditions change.

II. They need to understand which costs would differ and which costs would follow the movement of inventory and so on.

• Statement I is true, statement II is false

• Statement I is false, statement II is true

• Both statements are true

• Both statements are false

How does financial leverage impact a firm's operations?

• It changes the method of production.

• It determines how the operations are financed.

• It affects the marketing strategy.

• It influences employee performance.

All of the following are the projected financial statement method except:

• Forecast the statement of changes in equity

• Forecast the income statement

• Raising the additional funds needed.

• Consider financing feedback.

Means of systematically thinking about the future and anticipating possible problems before they occur.

• Short range Planning

• Long range Planning

• Short term planning

• Long term planning

The denominator in getting the break-even point (units) is:

• Sales

• Fixed Costs

• Contribution Margin per unit

• Unit Selling Price