Practical Financial Management 8th Edition by William R. Lasher – Test Bank
Chapter 4 – Financial Planning
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1. Which of the following sections of a business plan is likely to contain information on why a business is likely to succeed against its competitors? a. Market analysis b. Mission and strategy statement c. Executive Summary d. Red herring prospectus ANSWER: a POINTS: 1 DIFFICULTY: Easy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FINA.LASH.17.04.01 – Business Planning NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science TOPICS: Business Planning KEYWORDS: Bloom’s: Knowledge DATE CREATED: 5/26/2015 8:57 AM DATE MODIFIED: 7/1/2015 3:37 PM |
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2. Which of the following would not usually be a section of a business plan? a. Management and staffing b. Mission and strategy statement c. Dividend policy d. Contingencies ANSWER: c POINTS: 1 DIFFICULTY: Easy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FINA.LASH.17.04.02 – Financial Projections NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science TOPICS: Business Planning KEYWORDS: Bloom’s: Knowledge DATE CREATED: 5/26/2015 8:57 AM DATE MODIFIED: 7/1/2015 3:38 PM |
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3. The major audiences for a firm’s business plan are: a. the firm’s own management. b. outside investors. c. neither a nor b. d. both a and b. ANSWER: d POINTS: 1 DIFFICULTY: Easy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FINA.LASH.17.04.02 – Financial Projections NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science TOPICS: Business Planning KEYWORDS: Bloom’s: Knowledge DATE CREATED: 5/26/2015 8:57 AM DATE MODIFIED: 7/1/2015 3:39 PM |
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4. Which of the following is not a major reason for developing a business plan? a. The process helps pull the management team together. b. The completed plan is a vehicle for communicating managements vision to others. c. Planning enables management to defend itself against criticism from disgruntled stockholders. d. The finished plan serves as a roadmap for running the business. ANSWER: c POINTS: 1 DIFFICULTY: Moderate QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FINA.LASH.17.04.02 – Financial Projections NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science TOPICS: Business Planning KEYWORDS: Bloom’s: Knowledge DATE CREATED: 5/26/2015 8:57 AM DATE MODIFIED: 7/1/2015 3:40 PM |
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5. Large companies tend to do which of the following types of business planning? a. Strategic planning b. Operational planning c. Budgeting and forecasting d. All of the above ANSWER: d POINTS: 1 DIFFICULTY: Easy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FINA.LASH.17.04.02 – Financial Projections NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science TOPICS: Business Planning KEYWORDS: Bloom’s: Knowledge DATE CREATED: 5/26/2015 8:57 AM DATE MODIFIED: 7/1/2015 3:41 PM |
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6. The time period covered by a business plan is often called the: a. plan’s maturity. b. budget period. c. planning horizon. d. planning quarter. ANSWER: c POINTS: 1 DIFFICULTY: Easy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FINA.LASH.17.04.01 – Business Planning NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science TOPICS: Business Planning KEYWORDS: Bloom’s: Knowledge DATE CREATED: 5/26/2015 8:57 AM DATE MODIFIED: 7/1/2015 3:41 PM |
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7. Strategic planning involves broad thinking about a firm’s mission, and goals. It usually has a time frame or planning horizon of: a. 10 to 20 years. b. one to three years. c. five years. d. Any of the above ANSWER: c POINTS: 1 DIFFICULTY: Easy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FINA.LASH.17.04.01 – Business Planning NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science TOPICS: Business Planning KEYWORDS: Bloom’s: Knowledge DATE CREATED: 5/26/2015 8:57 AM DATE MODIFIED: 7/1/2015 3:42 PM |
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8. An operating plan: a. translates business ideas into concrete relatively short-term projections. b. backs up financial projections with a great deal of detail. c. concentrates on broad strategic issues despite its shorter term focus. d. a and b ANSWER: d POINTS: 1 DIFFICULTY: Easy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FINA.LASH.17.04.01 – Business Planning NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science TOPICS: Business Planning KEYWORDS: Bloom’s: Knowledge DATE CREATED: 5/26/2015 8:57 AM DATE MODIFIED: 7/1/2015 3:43 PM |
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9. Budgets are usually: a. short-run supplements to the strategic plans. b. quarterly updates to the annual operating plans. c. especially important in stable industries. d. usually done in great detail by small businesses. ANSWER: b POINTS: 1 DIFFICULTY: Easy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FINA.LASH.17.04.01 – Business Planning NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science TOPICS: Business Planning KEYWORDS: Bloom’s: Knowledge DATE CREATED: 5/26/2015 8:57 AM DATE MODIFIED: 7/1/2015 3:44 PM |
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10. Although budgeting and forecasting appear similar, forecasting relates to a shorter time horizon and usually focuses on: a. cash flow and profitability. b. capital considerations. c. human resources. d. meeting engineering goals. ANSWER: a POINTS: 1 DIFFICULTY: Easy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FINA.LASH.17.04.01 – Business Planning NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science TOPICS: Business Planning KEYWORDS: Bloom’s: Knowledge DATE CREATED: 5/26/2015 8:57 AM DATE MODIFIED: 7/1/2015 3:45 PM |
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