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Multiple Choice



This activity contains 20 questions.

Question 1.
The ______ summarises the firm's cash flow over a given period of time.


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Question 2.
Given the financial manager's preference for faster receipt of cash flows:


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Question 3.
The statement of cash flows provides a summary of the firm's _____________.


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Question 4.
Cash flows directly related to the production and sale of the firm's products and services are called:


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Question 5.
Cash flows associated with purchase and sale of both non-current assets and business interests are called:


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Question 6.
Cash flows that result from debt and equity financing transactions, including incurrence and repayment of debt, cash inflows from the sale of shares, and cash outflows to pay cash dividends or repurchase shares are called:


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Question 7.
The financial planning process begins with _____ financial plans that in turn guide the formation of _____ plans and budgets.


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Question 8.
The key aspects of the financial planning process are:


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Question 9.
Pro forma statements are used for:


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Question 10.
_____ consider proposed fixed-asset outlays, research and development activities, marketing and product development actions, and both the mix and major sources of financing.


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Question 11.
Once sales are forecasted, _____ must be generated to estimate a variety of operating costs.


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Question 12.
In cash budgeting, the _____ seasonal and uncertain a firm's cash flows, the _____ the number of intervals.


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Question 13.
Cash disbursements may include all of the following EXCEPT:


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Question 14.
One way a firm can reduce the amount of cash it needs in any one month is to:


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Question 15.
If a firm expects short-term cash surpluses it can plan:


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Question 16.
The key inputs for preparing pro forma income statements using the simplified approaches are the:


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Question 17.
The _____ method of developing a pro forma income statement forecasts sales and values for the cost of goods sold, operating expenses, and interest expenses that are expressed as a ratio of projected sales.


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Question 18.
The primary purpose in preparing pro forma financial statements is:


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Question 19.
Under the judgmental approach for developing a pro forma balance sheet, the 'plug' figure required to bring the statement into balance may be called the:


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Question 20.
A weakness of the per cent-of-sales method to preparing a pro forma income statement is:


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