Exam 27: Cash Management

If the total long term financing of the firm is greater than the total financing needs for part of the year,and less than the needs for some of the year due to seasonal fluctuations,the company will most likely:

The Smythe firm expects a total cash need of $9,000 over the next 4 months. They have a beginning cash balance of $1,000,and cash is replenished when it hits zero. The fixed cost of selling securities to replenish cash balances is $4.00. The interest rate on marketable securities is 8% per annum. There is a constant rate of cash disbursement and no cash receipts during the month. Based on the firm's current practice,how many times during the next 3 months will the cash balance be replenished?

Adjustable rate preferred stock (ARPS) offer competitive rates of return with traditional money-market instruments but:

Your firm receives 10 checks per month. Of these,6 are for $1,000 and 4 are for $500. The delay for the $1,000 checks is 5 days,and the $500 checks are delayed 8 days. Calculate the average daily float.

The most common cash management technique used to speed up collections is:

Your firm has average daily receipts of $2,500. These receipts are available after 6 days on average. The interest rate that could be earned is .02% (.0002) per day. What is the approximate cost of the float per day?

A sensible cash management policy would be to:

Even though the dividend rate on an Adjustable-Rate Preferred Stock (ARPS) is floating to keep in line with interest rates,the instrument still suffers from risk such as:

The Smythe firm expects a total cash need of $9,000 over the next 4 months. They have a beginning cash balance of $1,000,and cash is replenished when it hits zero. The fixed cost of selling securities to replenish cash balances is $4.00. The interest rate on marketable securities is 8% per annum. There is a constant rate of cash disbursement and no cash receipts during the month. Based on the firm's current practice,what is the average daily cash balance (a month has 30 days)?

Checks written by the firm are said to generate:

Firms hold cash,in part,to satisfy compensating balances. Compensating balances are:

If a firm has achieved its target cash balance the net present value is:

Which of the following money-market securities has no active secondary market?

A firm with low cash balances will need to borrow to cover an unexpected cash outflow:

In determining the firm's target cash balance,trading costs:

Firms hold cash to satisfy the transaction motive. This means that cash is held:

The cost of holding cash:

Discuss the Check Clearing Act for the 21^st Century,known as Check 21 and how it will impact floats.

During the month you receive 4 checks,one for $100,two for $200,and one for $500. They are delayed for 2 days,4 days,and 8 days respectively. What is your average daily collection float (a month has 30 days)?

The Timberline firm expects a total cash need of $12,500 over the next 3 months. They have a beginning cash balance of $1,500,and cash is replenished when it hits zero. The fixed cost of selling securities to replenish cash balances is $3.50. The interest rate on marketable securities is 8% per annum. There is a constant rate of cash disbursement and no cash receipts during the month. Based on the firm's current practice,what is the average daily cash balance (a month has 30 days)?