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BAM 513 Financial Management: Concepts and Applications

A comprehensive review of financial management concepts and their applications in business.

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    BAM 513 Financial Management: Concepts and Applications BAM 513 - Financial Management (Set - 1) BAM 513 - Financial Management Text: Principles of Managerial Finance 12th Edition, 2009 ISBN: 0 - 321 - 52413 - 6 Author(s): Lawrence J. Gitman Publisher: Pearson Education Financial Management Multiple Choice Questions (Enter your answers on the enclosed answer sheet) 1) Managerial finance devotes the majority of its attention to the collection and presentation of financial data. involves tasks such as budgeting, financial forecasting, cash management, and funds procurement. involves the design and delivery of advice and financial products. recognizes funds on an accrual basis. 2) Financial service is concerned with the duties of the financial manager. involves the design and delivery of advice and financial products. handles accounting activities related to data processing. provides guidelines for the efficient operation of the business. 3) A major weakness of a partnership is difficulty liquidating or transferring ownership. limited liability. access to capital markets. low organizational costs. 4) The primary economic principle used in managerial finance is the crowding out effect. the liquidity trap. supply and demand. marginal analysis.

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    5) Johnson, Inc. has just ended the calendar year making a sale in the amount of $10,000 of merchandise purchased during the year at a total cost of $7,000. Al - though the firm paid in full for the merchandise during the year, it has yet to collect at year end from the customer. The net profit and cash flow from this sale for the year are $7,000 and - $3,000, respectively. $3,000 and - $7,000, respectively. $3,000 and $7,000, respectively. $3,000 and $10,000, respectively. 6) By concentrating on cash flows within the firm the financial manager should be able to control expenses. avoid insolvency. prepare tax returns. speak authoritatively to stockholders. 7) A firm has just ended its calendar year making a sale in the amount of $200,000 f merchandise purchased during the year at a total cost of $150,500. Although the firm paid in full for the merchandise during the year, it has yet to collect at year end from the customer. The possible problem this firm may face is high leverage. low profitability . lack of cash flow. inability to receive credit. 8) Included in the primary activities of the financial manager are financial analysis and planning. making financing decisions. analyzing and planning cash flows. making investment decisions. all of the above 9) The financial manager may be responsible for any of the following EXCEPT analyzing the effects of more debt on the firm's capital structure. determining whether to accept or reject a capital asset acquisition. analyzing budget and performance reports. monitoring of quarterly tax payments. 10) Managing the firm's assets includes all of the following EXCEPT notes payable. accounts receivable. fixed assets. inventory. 11) The primary goal of the financial manager is maximizing profit. minimizing return. minimizing risk.

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