Money Matters LAP Quiz

1. The primary role of finance in business involves

• 1. obtaining funds.

• 1. paying employees.

• 1. buying supplies.

• 1. preparing expense reports.

1. When businesses invest funds to expand, they are involved in the process of

• 1. depreciation.

• 1. finance.

• 1. selling.

• 1. capitalism.

1. In business, the financial function monitors and controls the company's

• 1. supply channel members.

• 1. selling and distribution efforts.

• 1. monetary returns and risks.

• 1. product development process.

1. Which of the following business activities monitors and controls the firm's revenue and debt:

• 1. Finance

• 1. Purchasing

• 1. Human resources management

• 1. Payroll

1. A business should strive to keep its cash conversion cycle as short as possible so it

• 1. can increase its profit margin.

• 1. has fewer liquid assets.

• 1. can earn dividends.

• 1. has cash available to use.

1. Which of the following is true of working capital management:

• 1. It decides how investments will be financed.

• 1. It determines which projects the business will invest in.

• 1. It deals with accounts payable and receivable.

• 1. It concerns long-term decisions.

1. The RDJ Company plans to sell stock and take out loans to build new manufacturing facilities in Taiwan and Peru over a three-year period. In this situation, the company is

• 1. using its working capital to expand.

• 1. solving a financial problem.

• 1. making a capital investment decision.

• 1. tightening its cash conversion cycle.

1. Which of the following is most likely to increase a company's capital assets:

• 1. Obtaining a loan to make payroll

• 1. Purchasing land for future expansion

• 1. Reducing operational expenses

• 1. Collecting accounts receivables

1. Which of the following is an example of debt funding:

• 1. Selling shares of the company to investors

• 1. Using assets already owned to fund a project

• 1. Obtaining money for a project through fundraising

• 1. Taking a loan out from a local bank

1. Working capital management decisions focus on

• 1. long-term company investments and projects.

• 1. the company’s current balance of assets and liabilities.

• 1. business projects, project financing, and fundraising.

• 1. whether or not to pay dividends to shareholders.