Unique security risk can be eliminated from an investor’s portfolio through diversification. Indicate whether the statement is true or false ANSWER TRUE
Which of the following types of forms is used to insure fluctuations in business personal property, such as inventory and finished goods? A) accounts receivable coverage form B) a value reporting form C) difference in conditions insurance D) business income insurance ANSWER Answer: B
A cash budget is often more valuable as a SHORT-term rather than a LONG-TERM financial forecasting vehicle. Indicate whether the statement is true or false ANSWER TRUE
Which of the following perils is not included in the causes-of-loss basic form of the ISO commercial package policy? A) fire B) lightning C) explosion D) flood ANSWER Answer: D
Financial managers should consider taking ________ financial risk when operating risk is high, but may consider taking ________ financial risk when operating risk is low. A) less; less B) less; more C) more; more D) more; less ANSWER B
On-The-Level Manufacturing buys materials on credit at the start of the month and pays in 60 days. They also sell on credit, bill customers at the beginning of the month, and receive payment 30 days later. Using Table 6.2, what is the net cash flow from purchases and sales for the month of February? A) […]
Which of the following statements about the causes-of-loss special form of the ISO commercial package policy is (are) true? I. The causes-of-loss special form provides open perils coverage and insures against direct physical loss. II. The causes-of-loss special form excludes loss caused by earthquake. A) I only B) II only C) both I and II […]
The ability to analyze the company’s strengths and weaknesses is a fundamental concept that a nonfinancial manager should understand in order to: A) better assess the current environment in which the firm operates. B) better assess future financing requirements. C) better understand the role of capital markets in raising long-term funds. D) better measure and […]
Which of the following statements is (are) true concerning the value reporting form? I. Failure to report accurately suspends coverage. II. If the insured underreports the property values at a location, and a loss occurs at that location, recovery is limited to the proportion that the last value reported bears to the value that should […]
Based on the information in Table 4-1, the operating profit margin is A) 37.5%. B) 47.5%. C) 26.4%. D) 32.8%. ANSWER B