1. The main focus of a stock-for-stock exchange is on:
a) the earnings per share impact of the exchange
b) the capital budgeting implications
c) the shareholders of the acquired firms
d) the growth opportunities
2. On the books of the acquiring firm, a merger may be treated as:
a) a cash purchase or a pooling of interests
b) a stock-for-stock exchange
c) a purchase of assets
d) a pooling of interests or a purchase of assets
3. Fundamental factors influencing exchange rates include:
a) inflation, government policies, translation exposure
b) interest rates, government policies, and expropriation
c) balance of payments, spot rates, and expropriation
d) government policies, balance of payments, inflation
4. Foreign exchange risk may be best defined as:
a) the chance of value change in foreign exchange rates
b) the chance that the demand for your currency will drop
c) the chance that exchange rates will be fixed
d) the political risk posed by foreign governments
5. Which of the following are not among the daily activities of financial management?
a) sale of stocks and bonds
b) credit management
c) inventory control
d) the receipt and disbursement of funds
6. The mix of debt and equity in a firm is referred to as the firm's:
a) primary capital
b) capital composition
c) cost of capital
d) capital structure
7. All of the following are decisions heavily impacted by federal income tax considerations except:
a) lease versus purchase decisions
b) the issuance of common shares versus debt
c) cash budgeting and dividend policy decisions
d) the decision to replace on asset
8. Debt utilization ratios measure:
a) the speed at which the firm is turning over its assets
b) the ability of the firm to earn an adequate return on sales, total assets, and invested capital
c) the firm's ability to pay off short term obligations as they are due
d) the debt position of the firm in light of its assets and earning power
9. Analyzing the performance of the firm through ratios over a number of years is referred to as:
a) financial analysis
b) ratio analysis
c) trend analysis
d) operations analysis
10. In order to determine cash receipts, the financial manager must know:
a) projected sales and the collection pattern
b) projected sales and the profit margin
c) gross profit and the collection pattern
d) gross profit and taxes