BEC 2 Flashcards
What tools are used in financial management (there are 2)
Time value of money and interest rate concepts
What is a common limitation of payback period, disc cash flows, internal rate of return, and net present value
They rely on the forecasting of future data
To determine the inventory reorder point, calculations normally include the
Average daily usage
The hurdle rate must be determined in advance for which method?
Net present value method
A curve on a graph with the rate of return on the vertical axis and time on the horizontal axis depicts
A yield curve showing the term structure of interest rates
A firm operating in a monopolistic competitive market structure will optimize its investment in research and development (R&D) when
The marginal cost of its investment in R&D equals the marginal revenue from that investment.
Which of the following is least likely to be a foreign exchange control that may be implemented by a country?
Banning possession of foreign currency by citizens.
Fixed exchange rates.
Restricting currency exchange to government approved exchangers.
Requiring a floating exchange rate.
Requiring a floating exchange rate.
Which of the following scenarios would encourage a company to use short-term loans to retire its ten-year bonds that have five years until maturity?
Interest rates have declined over the last five years.
Which of the following financial instruments generally provides the largest source of short-term credit for small firms?
(This question is CMA adapted)
Installment loans.
Commercial paper.
Trade credit.
Mortgage bonds.
Trade credit.
In a client/server environment, the “client” is most likely to be the
Computers of various users
At Mega-Construction, secured payments are sent to suppliers as soon as materials are received and scanned. Many attributes of the received goods are also scanned and recorded immediately on receipt (e.g., time received, quality indicators, item location through GPS functionality). This information is shared through a distributed ledger. Mega-Construction is likely using _______________.
Blockchain
TCP/IP
Bitcoin
STMP
Blockchain
How do you find the accounting rate of return
Avg annual after-tax net income/Avg cost of the investment
A transaction processing system allows an authorized individual to select a quantity of items from the company’s online inventory. It is also possible to trace back to a copy of the purchase order to see when the items were ordered and who authorized the order. Which of the following features does this system have?
Automated order processing
An audit trail
An inventory tracking system
Real-time inventory auditing
Audit Trail
True or False: Pledging AR and Factoring AR is a form of short-term financing
True
Assuming exchange rates are allowed to fluctuate freely, which one of the following factors would likely cause a nation’s currency to appreciate on the foreign exchange market?
(This question is CMA adapted)
A relatively rapid rate of growth in income that stimulates imports.
A high rate of inflation relative to other countries.
A slower rate of growth in income than in other countries, which causes imports to lag behind exports.
Domestic real interest rates that are lower than real interest rates abroad.
A slower rate of growth in income than in other countries, which causes imports to lag behind exports.
