WorksheetsTEST FIN2603 - SESSION 1 2023/2024
Total questions: 30
Worksheet time: 30mins
The principles of business finance are quite different from the principles of personal finance.
TRUE
FALSE
Financing activities are transactions involving externals sources of funding.
TRUE
FALSE
The responsibility of financial managers to allocate funds to current assets only.
TRUE
FALSE
Maximizing the price of a share of the firm's common share is the equivalent of maximizing the wealth of the firm's present owners.
TRUE
FALSE
The "new issues market" -- where first-time security issues are offered for sale -- is called the secondary market.
TRUE
FALSE
The goal of working capital management is to ensure that there is adequate cash flow for operations with the most productive use of resources.
TRUE
FALSE
Firm holding cash to avail the benefit of bargain purchases that may arise in the future call as precautionary motive.
TRUE
FALSE
Day sales outstanding is measuring the average length of time it takes a firm’s customers to pay off their credit purchases.
TRUE
FALSE
Inventories are stocks of goods and materials that are maintained for many purposes.
TRUE
FALSE
Inventory carries its greatest costs after value has been added through manufacturing and processing.
TRUE
FALSE
Financial Management is mainly concerned with ______________.
All aspects of acquiring and utilizing financial resources for firms’ activities
Arrangement of funds
Efficient Management of every business
Profit maximization
The decision functions of financial management cover___________.
Investment decisions
Financing decisions
Asset management decisions
All the above
The primary goal of the financial management is to____________.
maximize profit
minimize the risk
maximize the return
maximize the wealth of owners
In financial markets, the period of maturity more than five years of financial instruments is classified as
intermediate term
capital term
short-term
long-term
The basic current liabilities are _____
accounts payable and bills payable
bank overdraft
outstanding expenses
All of the above
A firm following an aggressive working capital strategy would _____
Hold substantial amount of fixed assets
Minimize the amount of short-term borrowing.
Finance fluctuating assets with long-term financing.
Minimize the amount of funds held in very liquid assets.
Firms hold cash time to time for the purpose of transactionary motive of holding cash means
Keeping a cash reserve for purchasing goods and services to balance out the cash inflows and outflow
Keeping the cash for all the transactions made during a periodic term
Keeping the cash for transactions mandatory for day to day activities.
Keeping the transactions for foreign trading
Which among the following components is calculated as the sum of the fixed costs that happen each time an item is ordered?
Carrying cost
Order cost
Holding cost
Storing cost
Which of the following is not an inventory?
Machines
Raw material
Finished products
Consumable tools
Which of the following marketable securities is the obligation of a commercial bank?
Commercial paper
Negotiable certificate of deposit
Bond
Treasury bills
A(n) (a) would be an example of a principal, while a manager would be an example of an agent.
(a) are the markets dealing with short-term securities that have a life of one year or less.
(a) serve as intermediaries that channel the savings of individuals, businesses and governments into loans or investments.
(a) is used to enhance business operations and delivery of financial services.
The ability of a computer or robot to do task that are usually done by humans they require human cognitive and judgement is call as (a) .
Working capital, or often referred to as net current assets, is usually define current assets minus (a) .
In applying the working capital policy, assets can be divided into (a) and temporary assets
The cost that include the administration cost of placing and receiving order, which consists of the cost of writing a purchase order, processing it and checking it with the invoice is call as a (a) .
An incentive for the customer to pay earlier rather than later is call as (a) .
There are three motive to holding cash which is transaction motive, precautionary motive and (a) .
