Question 1

Which of the following statements is FALSE?

Accepted Answer

A) Similar to the situation with its accounts receivable,a firm should monitor its accounts payable to ensure that it is making its payments at an optimal time. 
B) Some firms ignore the payment due period and pay later,in a practice referred to as pushing the accounts payable. 
C) Suppliers may react to a firm whose payments are always late by imposing terms of cash on delivery (CO
D) or cash before delivery (CB
D) . 
D) If the accounts payable outstanding is 40 days and the terms are 2/10,net 30,the firm can conclude that it generally pays late and may be risking supplier difficulties. 
A) Similar to the situation with its accounts receivable,a firm should monitor its accounts payable to ensure that it is making its payments at an optimal time. 
B) Some firms ignore the payment due period and pay later,in a practice referred to as pushing the accounts payable. 
C) Suppliers may react to a firm whose payments are always late by imposing terms of cash on delivery (CO
D) or cash before delivery (CB
D) . 
D) If the accounts payable outstanding is 40 days and the terms are 2/10,net 30,the firm can conclude that it generally pays late and may be risking supplier difficulties.

Question 2

The percentage of Wyatt's receivables that are still eligible to take the discount is closest to:

Accepted Answer

A) 20.1% 
B) 32.1% 
C) 38.3% 
D) 42.2% 
A) 20.1% 
B) 32.1% 
C) 38.3% 
D) 42.2%

Question 3

Which of the following statements is FALSE?

Accepted Answer

A) Under the Modigliani-Miller assumptions of perfect capital markets,the amounts of payables and receivables are irrelevant. 
B) One factor that contributes to the length of a firm's receivables and payables is the delay between the time a bill is paid and the cash is actually received. 
C) Collection float is the amount of time it takes before payments to suppliers actually result in a cash outflow for the firm. 
D) The credit that the firm is extending to its customer is known as trade credit. 
A) Under the Modigliani-Miller assumptions of perfect capital markets,the amounts of payables and receivables are irrelevant. 
B) One factor that contributes to the length of a firm's receivables and payables is the delay between the time a bill is paid and the cash is actually received. 
C) Collection float is the amount of time it takes before payments to suppliers actually result in a cash outflow for the firm. 
D) The credit that the firm is extending to its customer is known as trade credit.

Question 4

Hammond's net working capital in 2009 is closest to:

Accepted Answer

A) $2.3 million 
B) $3.8 million 
C) $6.5 million 
D) $10.5 million 
A) $2.3 million 
B) $3.8 million 
C) $6.5 million 
D) $10.5 million

Question 5

The percentage of Wyatt's receivables that are more than 30 days past due is closest to:

Accepted Answer

A) 20.1% 
B) 32.1% 
C) 38.3% 
D) 42.2% 
A) 20.1% 
B) 32.1% 
C) 38.3% 
D) 42.2%

Question 6

Luther's Accounts Receivable days is closest to:

Accepted Answer

A) 42 days 
B) 39 days 
C) 32 days 
D) 59 days 
A) 42 days 
B) 39 days 
C) 32 days 
D) 59 days

Question 7

The term 2/10 net 30 means:

Accepted Answer

A) If the invoice is paid within 10 days a 2% discount can be taken.If the invoice is paid between 11 and 29 days a 1% discount can be taken.After 30 days the full invoice is due. 
B) If the invoice is paid within 2 days a 10% discount can be taken,otherwise the full invoice is due in 30 days. 
C) If the invoice is paid within 2 days a 10% discount can be taken,otherwise a 2% discount can be taken if the invoice is paid in 30 days. 
D) If the invoice is paid within 10 days a 2% discount can be taken,otherwise the full invoice is due in 30 days. 
A) If the invoice is paid within 10 days a 2% discount can be taken.If the invoice is paid between 11 and 29 days a 1% discount can be taken.After 30 days the full invoice is due. 
B) If the invoice is paid within 2 days a 10% discount can be taken,otherwise the full invoice is due in 30 days. 
C) If the invoice is paid within 2 days a 10% discount can be taken,otherwise a 2% discount can be taken if the invoice is paid in 30 days. 
D) If the invoice is paid within 10 days a 2% discount can be taken,otherwise the full invoice is due in 30 days.

Question 8

The amount of cash a firm needs to be able to pay its bills is sometimes referred to as a(n):

Accepted Answer

A) operating balance. 
B) compensating balance. 
C) transactions balance. 
D) precautionary balance. 
A) operating balance. 
B) compensating balance. 
C) transactions balance. 
D) precautionary balance.

Which of the following statements is FALSE?

The percentage of Wyatt's receivables that are still eligible to take the discount is closest to:

Which of the following statements is FALSE?

Hammond's net working capital in 2009 is closest to:

The percentage of Wyatt's receivables that are more than 30 days past due is closest to:

Luther's Accounts Receivable days is closest to:

The term 2/10 net 30 means:

The amount of cash a firm needs to be able to pay its bills is sometimes referred to as a(n):

The Corporation

Introduction to Financial Statement Analysis

Financial Decision Making and the Law of One Price

The Time Value of Money

Interest Rates

Valuing Bonds

Investment Decision Rules

Fundamentals of Capital Budgeting

Valuing Stocks

Capital Markets and the Pricing of Risk

Optimal Portfolio Choice and the Capital Asset Pricing Model

Estimating the Cost of Capital

Investor Behavior and Capital Market Efficiency

Capital Structure in a Perfect Market

Debt and Taxes

Financial Distress,managerial Incentives,and Information

Payout Policy

Capital Budgeting and Valuation With Leverage

Valuation and Financial Modeling: a Case Study

Financial Options

Option Valuation

Real Options

Raising Equity Capital

Debt Financing

Leasing

Short-Term Financial Planning

Mergers and Acquisitions

Corporate Governance

Risk Management

International Corporate Finance

Filters

Exam 26: Working Capital Management

Which of the following statements is FALSE?

The percentage of Wyatt's receivables that are still eligible to take the discount is closest to:

Which of the following statements is FALSE?

Hammond's net working capital in 2009 is closest to:

The percentage of Wyatt's receivables that are more than 30 days past due is closest to:

Luther's Accounts Receivable days is closest to:

The term 2/10 net 30 means:

The amount of cash a firm needs to be able to pay its bills is sometimes referred to as a(n):

The Corporation

Introduction to Financial Statement Analysis

Financial Decision Making and the Law of One Price

The Time Value of Money

Interest Rates

Valuing Bonds

Investment Decision Rules

Fundamentals of Capital Budgeting

Valuing Stocks

Capital Markets and the Pricing of Risk

Optimal Portfolio Choice and the Capital Asset Pricing Model

Estimating the Cost of Capital

Investor Behavior and Capital Market Efficiency

Capital Structure in a Perfect Market

Debt and Taxes

Financial Distress,managerial Incentives,and Information

Payout Policy

Capital Budgeting and Valuation With Leverage

Valuation and Financial Modeling: a Case Study

Financial Options

Option Valuation

Real Options

Raising Equity Capital

Debt Financing

Leasing

Short-Term Financial Planning

Mergers and Acquisitions

Corporate Governance

Risk Management

International Corporate Finance

Filters