Question

Jackson Plumbing, a medium-sized company, wants to guarantee that it can obtain short-term funds to meet unexpected future cash needs. Which of the following strategies would best meet the financing needs of Jackson Plumbing? Financial managers at Jackson Plumbing should:
A issue commercial paper as needed.

B request that the firm's board of directors approve an issue of additional shares of common stock.

C arrange for a revolving credit agreement with Jackson Plumbing's commercial bank.

D eliminate credit sales to improve their cash inflows and reduce the firm's investment in accounts receivable.



Lending institutions may offer a borrower a percentage of the value of the borrower's accounts receivable so the borrowing firm can continue to operate while it waits to collect on its credit sales. This process is called _________.

A establishing a line of credit

B inventory valuation

C pledging

D revolving credit



Susan started a cake decorating business that failed. She is convinced that she lacked the necessary funds to promote her business and get it off the ground. Susan experienced:

A Inadequate financial control.

B Undervalued inventory.

C Undercapitalization.

D A cash flow issue.



A(n) __________ is responsible for verifying that the accounting procedures within a firm are consistent with established accounting principles.

A managerial accountant

B tax accountant

C bookkeeper

D internal auditor



When Liberty Industries renegotiated their loan agreement, they borrowed an additional $2 million. The new loan requires Liberty to repay the new amount in nine months. Liberty's activity represents ________ financing.

A equity

B debt

C revitalized

D secured



Chunky Chicken, Inc. announced yesterday that it plans to issue $100 million in debenture bonds to fund the expansion of its fast food chain of restaurants. In financial terms, this means:

A The corporation will borrow $100 million worth of long-term financing. The bond issue will not carry any collateral.

B The corporation will issue $100 million worth of equity financing. The bond issue will be backed by the property and buildings purchased with the funds.

C The corporation will borrow $100 million worth of long-term financing. The issue will be backed by the property and buildings purchased with the funds.

D The corporation will issue $100 million worth of interest free bonds. Financiers will be paid from the revenues created by the individual franchises.



Carlos is the manager of Oh! Canada Sporting Goods. During the past six months, his cash expenditures have exceeded his cash receipts. Oh! Canada is suffering from a(n) ________ problem.

A accounting

B undercapitalization

C cash flow

D exchange rate



To reduce the time and expense of collecting their accounts receivable, some firms:

A extend credit to new customers.

B offer extended payment plans to existing customers.

C adopt a just-in-time inventory policy.

D accept bank credit cards.



If a company secures a three year bank loan, it is considered _________.

A short-term financing

B asset funding

C liability funding

D long-term financing

Answer 1

D is correct u have get rid of something