Calculate the value of Accounts Receivable, given the following information: \[\begin{array} { | l | c | } \hline \text { Data: } & \\ \hline \text { Average Inventory } & 7,000.00 \\ \hline \text { Average AR } & ? \\ \hline \text { Average AP } & 3,500.00 \\ \hline \text { Sales } & 120,000.00 \\ \hline \text { COGS } & 95,000.00 \\ \hline \text { Cash Conversion Cycle } & 51.47 \\ \hline \text { Inventory Period } & 26.89 \\ \hline \text { Payables Period } & 13.45 \\ \hline \end{array}\]

A) $10,500 B) $11,500 C) $12,500 D) $13,500 A) $10,500 B) $11,500 C) $12,500 D) $13,500

Calculate the Cash Conversion and Operating cycle, given the following information: \[\begin{array} { | l | c | } \hline \text { Data: } & \\ \hline \text { Average Inventory } & 1,500.00 \\ \hline \text { Average AR } & 2,500.00 \\ \hline \text { Average AP } & 650.00 \\ \hline \text { sales } & 12,000.00 \\ \hline \text { COGB } & 9,500.00 \\ \hline \end{array}\]

A) 107 days and 132 days B) 109 days and 134 days C) 111 days and 136 days D) 113 days and 138 days A) 107 days and 132 days B) 109 days and 134 days C) 111 days and 136 days D) 113 days and 138 days

Globex Corporation is estimating its cash collections for the first quarter of next year (January, February and March).The company has provided you with monthly sales along with historical cash collections data.Calculate the total cash received for January, February and March given the following data: \[\begin{array}{ | c | c | c | c | c | c | } \hline & \text { Navember } & \text { December } & \text { January } & \text { February } & \text { March } \\ \hline \text { Sales } & \$ 60,000 & \$ 80,000 & \$ 95,000 & \$ 105,000 & \$ 120,000 \\ \hline\text { Estimated Collection: }\\ \hline 75 \% & \text { In month of sale } & & & \\ \hline 20 \% & \text { In month after sale } & & & \\ \hline 5 \% & \text { In second month after sale } & & & \\ \hline \end{array}\]

The answer of Globex Corporation is estimating its cash collections...

Determine the value of Accounts Payable given the following information: \[\begin{array} { | l | c | } \hline { \text { Data: } } & \\ \hline \text { Average Irveritory } & 3,000.00 \\ \hline \text { Average AR } & 5,000.00 \\ \hline \text { Average AP } & ? \\ \hline \text { sales } & 40,000.00 \\ \hline \text { COGs } & 30,000.00 \\ \hline \text { Cash Corversion Cycle } & 64.48 \\ \hline \text { Irventory Period } & 36.50 \\ \hline \text { Receivable Period } & 45.63 \\ \hline \end{array}\]

A) $4,450 B) $3,450 C) $2,450 D) $1,450 A) $4,450 B) $3,450 C) $2,450 D) $1,450

Exam 20: Short-Term Financial Planning

What strategy regarding long- versus short-term financing is not being followed if managers resort to short-term investing during downturns in the business cycle?

(Multiple Choice)

4.8/5

(81)

Question 81

The cost of issuing commercial paper is generally lower than that of a line of credit.

(True/False)

4.8/5

(69)

Question 82

Which of the following is more likely for a firm practicing the "relaxed" strategy of long- versus short-term borrowing at the height of sales demand?

(Multiple Choice)

4.8/5

(75)

Question 83

A firm has $50 million and $60 million credit sales during the first two quarters of the year.Eighty percent of the receivables are collected in the same quarter and the balance in the next quarter.What will be the total collection for the firm in the second quarter?

(Multiple Choice)

4.9/5

(83)

Question 84

A firm borrows $200,000 from the bank, but has to maintain a compensating balance of $15,000 with the bank.The annual interest rate for the loan is 13%.What is the effective annual rate if the interest is compounded annually?

(Multiple Choice)

4.8/5

(78)

Question 85

The time interval between paying for raw materials and collecting on sales of finished goods is known as the:

(Multiple Choice)

4.9/5

(75)

Question 86

Calculate the value of Accounts Receivable, given the following information: Data: Average Inventory 7,000.00 Average AR ? Average AP 3,500.00 Sales 120,000.00 COGS 95,000.00 Cash Conversion Cycle 51.47 Inventory Period 26.89 Payables Period 13.45

(Multiple Choice)

5.0/5

(82)

Question 87

Calculate the Cash Conversion and Operating cycle, given the following information: Data: Average Inventory 1,500.00 Average AR 2,500.00 Average AP 650.00 sales 12,000.00 COGB 9,500.00

(Multiple Choice)

4.9/5

(76)

Question 88

What is the cash conversion cycle for a firm with $3 million average inventories, $1.5 million average accounts payable, a receivables period of 45 days, and an annual cost of goods sold of $18 million?

(Multiple Choice)

4.9/5

(78)

Question 89

List and explain the four forecast uses of cash.

(Essay)

4.9/5

(67)

Question 90

Which of the following would not be included as a source of short-term financing?

(Multiple Choice)

5.0/5

(88)

Question 91

Managers are alerted to projected cash shortages by way of the:

(Multiple Choice)

4.8/5

(82)

Question 92

Some companies solve their financing problem by borrowing on the strength of their current assets; others solve it by selling their current assets.

(True/False)

5.0/5

(70)

Question 93

Globex Corporation is estimating its cash collections for the first quarter of next year (January, February and March).The company has provided you with monthly sales along with historical cash collections data.Calculate the total cash received for January, February and March given the following data: Navember December January February March Sales \ 60,000 \ 80,000 \ 95,000 \ 105,000 \ 120,000 Estimated Collection: 75\% In month of sale 20\% In month after sale 5\% In second month after sale

(Essay)

4.8/5

(76)

Question 94

Which of the following would not be considered a use of cash?

(Multiple Choice)

4.8/5

(79)

Question 95

Firms are often known to pay commitment fees to banks for the privilege of receiving a line of credit.Does it make sense for a firm to pay for something that, at least at the present time, it does not know whether it will use?

(Essay)

5.0/5

(87)

Question 96

When the bank stamps "______" on the draft, it becomes a banker's acceptance and represents an unconditional promise of the bank to pay the amount stated on the draft when it matures.

(Multiple Choice)

4.9/5

(67)

Question 97

Determine the value of Accounts Payable given the following information: Data: Average Irveritory 3,000.00 Average AR 5,000.00 Average AP ? sales 40,000.00 COGs 30,000.00 Cash Corversion Cycle 64.48 Irventory Period 36.50 Receivable Period 45.63

(Multiple Choice)

4.8/5

(68)

Question 98

A firm borrows $100,000 from the bank, but has to maintain a compensating balance of $20,000 with the bank.The annual interest rate for the loan is 12%.What is the effective annual rate if the interest is compounded monthly?

(Multiple Choice)

4.9/5

(78)

Question 99

Discuss the usefulness of the concept of "maturities matching" in finance.

(Essay)

4.8/5

(79)

Question 100

Exam 20: Short-Term Financial Planning

What strategy regarding long- versus short-term financing is not being followed if managers resort to short-term investing during downturns in the business cycle?

The cost of issuing commercial paper is generally lower than that of a line of credit.

Which of the following is more likely for a firm practicing the "relaxed" strategy of long- versus short-term borrowing at the height of sales demand?

A firm has $50 million and $60 million credit sales during the first two quarters of the year.Eighty percent of the receivables are collected in the same quarter and the balance in the next quarter.What will be the total collection for the firm in the second quarter?

A firm borrows $200,000 from the bank, but has to maintain a compensating balance of $15,000 with the bank.The annual interest rate for the loan is 13%.What is the effective annual rate if the interest is compounded annually?

The time interval between paying for raw materials and collecting on sales of finished goods is known as the:

Calculate the value of Accounts Receivable, given the following information: Data: Average Inventory 7,000.00 Average AR ? Average AP 3,500.00 Sales 120,000.00 COGS 95,000.00 Cash Conversion Cycle 51.47 Inventory Period 26.89 Payables Period 13.45

Calculate the Cash Conversion and Operating cycle, given the following information: Data: Average Inventory 1,500.00 Average AR 2,500.00 Average AP 650.00 sales 12,000.00 COGB 9,500.00

What is the cash conversion cycle for a firm with $3 million average inventories, $1.5 million average accounts payable, a receivables period of 45 days, and an annual cost of goods sold of $18 million?

List and explain the four forecast uses of cash.

Which of the following would not be included as a source of short-term financing?

Managers are alerted to projected cash shortages by way of the:

Some companies solve their financing problem by borrowing on the strength of their current assets; others solve it by selling their current assets.

Which of the following would not be considered a use of cash?

Firms are often known to pay commitment fees to banks for the privilege of receiving a line of credit.Does it make sense for a firm to pay for something that, at least at the present time, it does not know whether it will use?

When the bank stamps "______" on the draft, it becomes a banker's acceptance and represents an unconditional promise of the bank to pay the amount stated on the draft when it matures.

Determine the value of Accounts Payable given the following information: Data: Average Irveritory 3,000.00 Average AR 5,000.00 Average AP ? sales 40,000.00 COGs 30,000.00 Cash Corversion Cycle 64.48 Irventory Period 36.50 Receivable Period 45.63

A firm borrows $100,000 from the bank, but has to maintain a compensating balance of $20,000 with the bank.The annual interest rate for the loan is 12%.What is the effective annual rate if the interest is compounded monthly?

Discuss the usefulness of the concept of "maturities matching" in finance.

Goals and Governance of the Firm

Financial Markets and Institutions

Accounting and Finance

Measuring Corporate Performance

The Time Value of Money

Valuing Bonds

Valuing Stocks

Net Present Value and Other Investment Criteria

Using Discounted Cash Flow Analysis to Make Investment Decisions

Project Analysis

Introduction to Risk, Return, and the Opportunity Cost of Capital

Risk, Return, and Capital Budgeting

The Weighted-Average Cost of Capital and Company Valuation

Introduction to Corporate Financing and Governance

Venture Capital, Ipos, and Seasoned Offerings

Debt Policy

Leasing

Payout Policy

Long-Term Financial Planning

Cash and Inventory Management

Credit Management and Collection

Mergers, Acquisitions, and Corporate Control

International Financial Management

Options

Risk Management

Filters