MIE 201 Final Exam
Financial Management - correct answer Planning for a firm's money needs and
managing the allocation and spending of funds
Risk/Return Trade Off - correct answer The balance of potential risks against
potential rewards
Financial Plan - correct answer A document that outlines the funds needed for a
certain period of time, along with the sources and intended uses of those funds
Accounts Receivable - correct answer Amounts that are currently owed to a firm
Accounts Payable - correct answer Amounts that a firm currently owes to other
parties
Budget - correct answer A planning and control tool that reflects expected revenues,
operating expenses, and cash receipts and outlays
Financial Control - correct answer The process of analyzing and adjusting that basic
financial plan to correct for deviations from forecasted events
Hedging - correct answer Protecting against cost increases with contracts that allow
a company to buy supplies in the future at designated prices
Zero-based Budgeting - correct answer A budgeting approach in which each
department starts from zero every year and must justify every item in the budget,
rather than simply adjusting the previous year's budget amounts
Start-up Budget - correct answer A budget that identifies the money a new company
will need to spend to launch operations
