SOLVED

1) The objectives and long-term plans of a business are part of A) Tactical Planning B) Goalsetting C) Operations Management D) Strategic Management E) Mission Identification 2) When finance department staff provide information to ensure that business plans are achieving expected profit levels and cash flow, they are performing the function of A) Risk Management B) Financial Control C) Investment Project Appraisal D) Capital Market Assessment E) Asset Management 3) A key activity in Capital Market operations involves A) Assessing the profitability of a proposed investment B) Balancing short-term and long-term financing C) Determining how much funding can be generated internally D) Providing cash flow information to operations managers E) Determining market reaction to proposed investment plans 4) Today, Financial Management can be appropriately described as A) The economics of time and risk B) A direct offshoot of accounting C) The quantitative side of strategic management D) A practice based on informal procedures E) The implementation of capital market theories 5) Capital markets play an important role in A) Curbing inflation B) Setting fiscal policy in Canada C) Setting interest rates D) Evaluating business performance through share price E) Reducing risks and increasing returns to investors 6) The over-the-counter market is A) An Internet based securities exchange for public trading B) A central location where dealers trade C) A network of dealers linked by computers and telephones D) Local public security exchanges similar to bank branches E) A central physical location where the general public trades 7) Last year, Benton Manufacturing, Inc. had capital invested of $2,500,000 on 50,000 shares outstanding and net income of $450,000. Benton recently issued another 10,000 shares at $50 each. What net income must the company achieve to maintain the previous year’s earnings per share? A) $300,000 B) $400,000 C) $450,000 D) $500,000 E) $540,000 8) The company is performing the function of financial control when it A) Raises funds from capital markets B) Takes corrective action to achieve business goals C) Assesses the riskiness of investment projects D) Identifies possible sources of funds E) Reinvests profits from operations 9) A key principle underlying modern financial management is that the primary objective of a business is A) Profit maximization B) Minimization of costs C) Minimization of government regulation D) Shareholder wealth maximization E) Marketshare maximization 10) Penrod Autoservice Ltd. has 200,000 common shares at a market value of $10 per share, and a net income after tax of $90,000. The company would like to issue 30,000 more shares at $10 per share. How much income after tax will the company have to earn to maintain current shareholders’ wealth? A) $22,500 B) $103,500 C) $112,500 D) $120,000 E) $199,500