Question

true or false

1. The APR formula is: net annual savings divided by average investment.

2. The operating activities section of a SCF, indirect method, evaluates only the disposal of depreciable assets.

3. Funds raised through proper financial management should never be invested in assets such a food and beverage inventories.

4. One of the advantages of profit maximization as a financial goal is that it takes into consideration every possible risk.

5. The concepts of financial management are basically the same for both profit and non-profit organizations.

6. Another term for a company’s statement of business purpose is a mission statement.

7. Renting an asset, from a cash flow point of view, may be more profitable than purchasing.

8. A method of accelerating the flow of funds from individual units in a chain operation to the company’s head office bank account is known as concentration banking.

9. The four levels in the decision making process are data production, data sorting, information production, and variance analysis.

10. Management by exception is the establishment of secondary goals set by the organization’s department heads.

Answer 1

1)False

APR = periodic rate for m months × 12/m

2)False

The operating activities section of a SCF, indirect method, does not evaluates only the disposal of depreciable assets

8)False

Concentration banking is the practice of shifting the funds in a set of bank accounts into an investment account, from which the funds can be more efficiently invested. Concentration banking usually requires that an organization keep all of its bank accounts with a single bank.

10)False

Management by exception is a style of business management that focuses on identifying and handling cases that deviate from the norm, recommended as best practice by the project management method PRINCE2

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