Exam 14: Working Capital and Policies

Which of the following will increase the operating cycle?

If a firm has a cash cycle of 10 days and an operating cycle of 43 days,what is its payables turnover?

The financing policy that will result in investing in marketable securities when asset requirements are low is referred to as:

Which of these is a short-term loan secured by a company's assets?

Which of the following actions will cause a firm's net working capital to increase?

If a firm has a cash cycle of 32 days and an operating cycle of 67 days,what is its payables turnover?

Which of the following is the best description of the operating cycle?

Everything else held constant,will an increase in the amount of inventory on hand increase or decrease the firm's profitability?

To trace cash flows through the firm's operations,we must measure which of the following? (It is the time necessary to acquire raw materials,turn them into finished goods,sell them,and receive payment for them.)

Which of the following is the technique for reducing collection float by having funds sent to several geographically situated regional banks and then transferring to a main concentration account in another bank?

Suppose that Dunn Industries has annual sales of $2.5 million,cost of goods sold of $1,850,000,average inventories of $1,900,000,and average accounts receivable of $660,000.Assuming that all of Dunn's sales are on credit,what will be the firm's operating cycle?

All of the following are examples of carrying costs EXCEPT:

All of the following will result in an increase in net working capital EXCEPT:

If a firm has a cash cycle of 47 days and an operating cycle of 92 days,what is its average payment period?

Would it be worth it to incur a compensating balance of $10,000 in order to get a 1-percent-lower interest rate on a 1-year,pure discount loan of $500,000?

All of the following are different techniques that can be used to help firms reduce collection float EXCEPT:

Which of the following is NOT a reason for holding cash?

Drawing,Inc.has sales of $860,000 and cost of goods sold of $450,000.The firm had a beginning inventory of $50,000 and an ending inventory of $59,000.What is the length of the days' sales in inventory?

Daisy D Industries has a cash balance of $75,000; accounts payable of $140,000; inventory of $300,000; accounts receivable of $350,000; notes payable of $145,000; and accrued wages and taxes of $80,000.How much net working capital does the firm need to fund?

PBJ Enterprises estimates that it takes,on average,three days for their customers' payments to reach them,three days for the payments to be processed and deposited by their bookkeeping department,and three more days for the checks to clear once they're deposited.What is their collection float?