Question 1

The basic strategies that should be employed by the business firm in managing cash include all of the following EXCEPT

Accepted Answer

A) paying accounts payable as late as possible without damaging the firm's credit rating. 
B) turning over inventory as quickly as possible while avoiding stock outs. 
C) operating in a fashion that requires maximum cash. 
D) collecting accounts receivable as quickly as possible without damaging customer rapport. 
E) none of the above 
A) paying accounts payable as late as possible without damaging the firm's credit rating. 
B) turning over inventory as quickly as possible while avoiding stock outs. 
C) operating in a fashion that requires maximum cash. 
D) collecting accounts receivable as quickly as possible without damaging customer rapport. 
E) none of the above

Question 2

As sales increase over time,assets will increase at the same growth rate so long as the

Accepted Answer

A) asset turnover increases 
B) asset turnover ratio remains constant 
C) asset turnover ratio decreases 
D) profit margin remains constant 
A) asset turnover increases 
B) asset turnover ratio remains constant 
C) asset turnover ratio decreases 
D) profit margin remains constant

Question 3

A negotiable CD is a marketable receipt issued by a bank in exchange for a deposit of funds.

Accepted Answer

A) True 
 B)False

Question 4

The cash conversion cycle measures the time between when a firm pays its suppliers for inventory and when it collects cash from customers on a sale of the finished product.

Accepted Answer

A) True 
 B)False

Question 5

Holding all other factors constant,if a firm increases its current assets relative to total assets,

Accepted Answer

A) it increases return and reduces risk. 
B) it increases return and increases risk. 
C) it reduces return and reduces risk. 
D) it reduces return and increases risk. 
E) none of above are correct 
A) it increases return and reduces risk. 
B) it increases return and increases risk. 
C) it reduces return and reduces risk. 
D) it reduces return and increases risk. 
E) none of above are correct

Question 6

BP has an operating cycle of 120 days,an average collection period of 40 days,and an average payment period of 30 days.Based on this information,BPs average age of inventory is ________ days.

Accepted Answer

A) 80 
B) 50 
C) 90 
D) 70 
E) none of the above 
A) 80 
B) 50 
C) 90 
D) 70 
E) none of the above

Question 7

Which of the following statements is most correct?

Accepted Answer

A) Eurodollars are deposits placed in foreign banks that remain denominated in U.S.dollars. 
B) Treasury bills are actively traded in secondary money markets. 
C) The most common trading unit for federal funds is $1 million. 
D) All of the above statements are correct. 
A) Eurodollars are deposits placed in foreign banks that remain denominated in U.S.dollars. 
B) Treasury bills are actively traded in secondary money markets. 
C) The most common trading unit for federal funds is $1 million. 
D) All of the above statements are correct.

Question 8

Which one of the following asset accounts is not a part of a firm's working capital?

Accepted Answer

A) cash and marketable securities 
B) accounts receivable 
C) inventories 
D) fixed assets 
A) cash and marketable securities 
B) accounts receivable 
C) inventories 
D) fixed assets

Question 9

Fixed capital would be defined as the firm's fixed assets,which include plant,equipment and property.

Accepted Answer

A) True 
 B)False

Question 10

If a firm purchases materials on credit and thus has accounts payable,its cash conversion cycle will be:

Accepted Answer

A) longer than its operating cycle 
B) the same length as its operating cycle 
C) shorter than its operating cycle 
D) the same length as its sales turnover cycle 
A) longer than its operating cycle 
B) the same length as its operating cycle 
C) shorter than its operating cycle 
D) the same length as its sales turnover cycle

Question 11

Cash disbursements may include all of the following EXCEPT

Accepted Answer

A) savings deposits 
B) depreciation expense 
C) amortization 
D) accrued wages 
E) none of the above 
A) savings deposits 
B) depreciation expense 
C) amortization 
D) accrued wages 
E) none of the above

Question 12

Transactions motives for holding cash include holding funds to meet unexpected demands.

Accepted Answer

A) True 
 B)False

Question 13

An inverted yield curve is upward sloping.

Accepted Answer

A) True 
 B)False

Question 14

One way a firm can reduce the amount of cash it needs in any one month is to

Accepted Answer

A) speed up the collection of receivables 
B) delay the payment of wages 
C) delay the payment of taxes 
D) delay the payment of payables 
E) all of the above 
A) speed up the collection of receivables 
B) delay the payment of wages 
C) delay the payment of taxes 
D) delay the payment of payables 
E) all of the above

Question 15

The current ratio concept is particularly useful in:

Accepted Answer

A) analyzing large firms 
B) comparing the financial positions of firms of varying sizes 
C) examining firms with large seasonal sales 
D) comparing the financial structures of firms of varying sizes 
A) analyzing large firms 
B) comparing the financial positions of firms of varying sizes 
C) examining firms with large seasonal sales 
D) comparing the financial structures of firms of varying sizes

Question 16

One way a firm can reduce the amount of cash it needs in any one month is to

Accepted Answer

A) slow down the payment of receivables 
B) delay the payment of wages 
C) speed up the payment of taxes 
D) speed up the payment of wages 
E) none of the above 
A) slow down the payment of receivables 
B) delay the payment of wages 
C) speed up the payment of taxes 
D) speed up the payment of wages 
E) none of the above

Question 17

The ________ is the time period that elapses from the point when the firm makes the outlay to purchase raw materials on account to the point when payment is made to the supplier of the goods.

Accepted Answer

A) cash conversion cycle 
B) average payment period 
C) average age of inventory 
D) average collection period 
E) none of the above 
A) cash conversion cycle 
B) average payment period 
C) average age of inventory 
D) average collection period 
E) none of the above

Question 18

Which of the following would not be a characteristic of commercial paper?

Accepted Answer

A) issued by well-known business firms 
B) debt is secured 
C) short-term debt 
D) all are characteristics of commercial paper 
A) issued by well-known business firms 
B) debt is secured 
C) short-term debt 
D) all are characteristics of commercial paper

Question 19

The operating cycle measures the time between when a firm pays its suppliers for inventory and when it collects cash from customers on a sale of the finished product.

Accepted Answer

A) True 
 B)False

Question 20

One item that does not affect the cash conversion cycle is:

Accepted Answer

A) inventory period 
B) accounts receivable 
C) accounts payable period 
D) all the above affect the cash conversion cycle 
A) inventory period 
B) accounts receivable 
C) accounts payable period 
D) all the above affect the cash conversion cycle

The basic strategies that should be employed by the business firm in managing cash include all of the following EXCEPT

As sales increase over time,assets will increase at the same growth rate so long as the

A negotiable CD is a marketable receipt issued by a bank in exchange for a deposit of funds.

The cash conversion cycle measures the time between when a firm pays its suppliers for inventory and when it collects cash from customers on a sale of the finished product.

Holding all other factors constant,if a firm increases its current assets relative to total assets,

BP has an operating cycle of 120 days,an average collection period of 40 days,and an average payment period of 30 days.Based on this information,BPs average age of inventory is ________ days.

Which of the following statements is most correct?

Which one of the following asset accounts is not a part of a firm's working capital?

Fixed capital would be defined as the firm's fixed assets,which include plant,equipment and property.

If a firm purchases materials on credit and thus has accounts payable,its cash conversion cycle will be:

Cash disbursements may include all of the following EXCEPT

Transactions motives for holding cash include holding funds to meet unexpected demands.

An inverted yield curve is upward sloping.

One way a firm can reduce the amount of cash it needs in any one month is to

The current ratio concept is particularly useful in:

One way a firm can reduce the amount of cash it needs in any one month is to

The ________ is the time period that elapses from the point when the firm makes the outlay to purchase raw materials on account to the point when payment is made to the supplier of the goods.

Which of the following would not be a characteristic of commercial paper?

The operating cycle measures the time between when a firm pays its suppliers for inventory and when it collects cash from customers on a sale of the finished product.

One item that does not affect the cash conversion cycle is:

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

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Exam 15: Managing Working Capital

The basic strategies that should be employed by the business firm in managing cash include all of the following EXCEPT

As sales increase over time,assets will increase at the same growth rate so long as the

A negotiable CD is a marketable receipt issued by a bank in exchange for a deposit of funds.

The cash conversion cycle measures the time between when a firm pays its suppliers for inventory and when it collects cash from customers on a sale of the finished product.

Holding all other factors constant,if a firm increases its current assets relative to total assets,

BP has an operating cycle of 120 days,an average collection period of 40 days,and an average payment period of 30 days.Based on this information,BPs average age of inventory is ________ days.

Which of the following statements is most correct?

Which one of the following asset accounts is not a part of a firm's working capital?

Fixed capital would be defined as the firm's fixed assets,which include plant,equipment and property.

If a firm purchases materials on credit and thus has accounts payable,its cash conversion cycle will be:

Cash disbursements may include all of the following EXCEPT

Transactions motives for holding cash include holding funds to meet unexpected demands.

An inverted yield curve is upward sloping.

One way a firm can reduce the amount of cash it needs in any one month is to

The current ratio concept is particularly useful in:

One way a firm can reduce the amount of cash it needs in any one month is to

The ________ is the time period that elapses from the point when the firm makes the outlay to purchase raw materials on account to the point when payment is made to the supplier of the goods.

Which of the following would not be a characteristic of commercial paper?

The operating cycle measures the time between when a firm pays its suppliers for inventory and when it collects cash from customers on a sale of the finished product.

One item that does not affect the cash conversion cycle is:

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters