Exam (elaborations)
Chapter 4 Long- and Short-Term Financial Planning
- Course
- Institution
Principles of Managerial Finance 8th Edition by Chad J. Zutter-Test Bank
[Show more]
Seller
Follow
premiumbiz379
Reviews received
Content preview
Principles of Managerial Finance, Brief Ed., 8e (Zutter/Smart)Chapter 4 Long- and Short-Term Financial Planning
4.1 The financial planning process
1) Strategic financial plans are planned long-term financial actions and the anticipated financial
impact of those actions.
Answer: TRUE
Diff: 1
Topic: Financial Planning Process
Learning Obj.: LG 1
Learning Outcome: F-25
AACSB: Analytical Thinking
2) A financial planning process begins with short-term, or operating, plans and budgets that in
turn guide the formulation of long-term, or strategic, financial plans.
Answer: FALSE
Diff: 1
Topic: Financial Planning Process
Learning Obj.: LG 1
Learning Outcome: F-25
AACSB: Analytical Thinking
3) The key input to the short-term financial planning process is ________.
A) the audit report
B) the pro forma balance sheet
C) the sales forecast
D) the pro forma income statement
Answer: C
Diff: 1
Topic: The Sales Forecast
Learning Obj.: LG 1
Learning Outcome: F-25
AACSB: Analytical Thinking
4) Operating financial plans are planned short-term financial actions and the anticipated financial
impact of those actions.
Answer: TRUE
Diff: 1
Topic: Financial Planning Process
Learning Obj.: LG 1
Learning Outcome: F-25
AACSB: Analytical Thinking
1
Copyright © 2019 Pearson Education, Inc.
,5) The sales forecast and various forms of operating and financial data are the key outputs of the
short-run (operating) financial planning.
Answer: FALSE
Diff: 1
Topic: Short-Term (Operating) Financial Plans
Learning Obj.: LG 1
Learning Outcome: F-25
AACSB: Analytical Thinking
6) The financial planning process begins with ________ financial plans that in turn guide the
formation of ________ plans and budgets.
A) short-term; long-term
B) short-term; short-term
C) long-term; long-term
D) long-term; short-term
Answer: D
Diff: 1
Topic: Financial Planning Process
Learning Obj.: LG 1
Learning Outcome: F-25
AACSB: Analytical Thinking
7) Short-term financial plans and long-term financial plans generally cover periods ranging from
________ years and ________ years, respectively.
A) one to two; two to ten
B) five to ten; ten to twenty
C) zero to one; five to ten
D) one to ten; ten to fifteen
Answer: A
Diff: 1
Topic: Financial Planning Process
Learning Obj.: LG 1
Learning Outcome: F-25
AACSB: Analytical Thinking
8) The key aspects of a financial planning process are ________.
A) cash planning and investment planning
B) operations planning and investment planning
C) investment planning and profit planning
D) cash planning and profit planning
Answer: D
Diff: 1
Topic: Financial Planning Process
Learning Obj.: LG 1
Learning Outcome: F-25
AACSB: Analytical Thinking
2
Copyright © 2019 Pearson Education, Inc.
,9) Pro forma financial statements are used for ________.
A) cash budgeting
B) preparing financial statements
C) profit planning
D) auditing
Answer: C
Diff: 1
Topic: Financial Planning Process
Learning Obj.: LG 1
Learning Outcome: F-02
AACSB: Analytical Thinking
10) The primary purpose in preparing pro forma financial statements is ________.
A) for cash planning
B) to ensure the ability to pay dividends
C) to reduce risk
D) for profit planning
Answer: D
Diff: 1
Topic: Financial Planning Process
Learning Obj.: LG 1
Learning Outcome: F-02
AACSB: Analytical Thinking
11) ________ consider proposed fixed-asset outlays, research and development activities,
marketing and product development actions, capital structure, and major sources of financing.
A) Short-term financial plans
B) Long-term financial plans
C) Pro forma statements
D) Cash budgeting
Answer: B
Diff: 1
Topic: Financial Planning Process
Learning Obj.: LG 1
Learning Outcome: F-02
AACSB: Analytical Thinking
3
Copyright © 2019 Pearson Education, Inc.
, 12) ________ generally reflect(s) the anticipated financial impact of planned long-term actions.
A) A cash budget
B) Strategic financial plans
C) Operating financial plans
D) A pro forma income statement
Answer: B
Diff: 1
Topic: Long-Term (Strategic) Financial Plans
Learning Obj.: LG 1
Learning Outcome: F-02
AACSB: Analytical Thinking
13) The key outputs of the short-term financial planning process are the ________.
A) cash budget, pro forma income statement, and pro forma balance sheet
B) sales forecast and capital assets journal
C) sales forecast and schedule of changes in working capital
D) income statement, balance sheet, and source and use statement
Answer: A
Diff: 1
Topic: Short-Term (Operating) Financial Plans
Learning Obj.: LG 1
Learning Outcome: F-25
AACSB: Analytical Thinking
14) Key inputs to short-term financial planning are ________.
A) cash flow statements and income statement
B) pro forma financial statements
C) sales forecasts, and operating and financial data
D) leverage analysis and pro forma income statement
Answer: C
Diff: 1
Topic: Short-Term (Operating) Financial Plans
Learning Obj.: LG 1
Learning Outcome: F-25
AACSB: Analytical Thinking
15) Once sales are forecasted, ________ must be generated to estimate required raw materials.
A) a production plan
B) a cash budget
C) an operating budget
D) a pro forma statement
Answer: A
Diff: 1
Topic: Short-Term (Operating) Financial Plans
Learning Obj.: LG 1
Learning Outcome: F-25
AACSB: Analytical Thinking
4
Copyright © 2019 Pearson Education, Inc.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller premiumbiz379. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $4.81. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75391 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now