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Multiple Choice

The role of business finance is to ensure that:
Answer

the company always reports a profit in its financial statements.

the methods a company uses to borrow, invest, spend, and lend its capital lead to a rate of return that maximizes the present market value of its stock.

revenues, expenses, cash flows, and profits do not swing wildly from one quarter to the next.

marketing develops campaigns that convince investors to buy stock.

the financial statements are prepared following GAAP.

Insuring that revenues and expenses are accurately recorded and that the appropriate accounting rules have been properly used to report this data is the role of_______________
Answer

Human Resources.

the Big Four.

external accountants.

internal auditors.

MBA's.

The development of a financial plan to allow a company to obtain the capital necessary to fund its investments in assets at the lowest possible cost is called:
Answer

a cash budget.

capital financing.

short-term capital management.

brand management.

portfolio management.

When Moody's or Standard and Poor's reduces the rating on a bond:
Answer

the interest rate paid to all bondholders will increase.

the interest rate paid to all bondholders will fall.

the par value of the bond will increase.

the price of the bond will increase.

the price of the bond will fall.

The money a company owes its regular suppliers for inputs, merchandise, or services is called_______________
Answer

accounts receivable.

prepaid expenses.

accounts payable.

accrued expenses.

owners' equity.

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1. the methods a company uses to borrow, invest, spend, and lend its capital ...

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The solution explains some multiple choice questions relating to business finance

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