Question 1

What is collection float?

Accepted Answer

Collection float is the amount

Question 2

Which of the following best describes the availability float?

Accepted Answer

A)  how long it takes the firm to process the check and deposit it in the bank 
B)  how long it takes before the bank gives the firm credit for the funds 
C)  how long it takes before payments to suppliers actually result in a cash outflow for the firm 
D)  how long it takes for a firm to be able to use funds after a customer has paid for its goods 
A)  how long it takes the firm to process the check and deposit it in the bank 
B)  how long it takes before the bank gives the firm credit for the funds 
C)  how long it takes before payments to suppliers actually result in a cash outflow for the firm 
D)  how long it takes for a firm to be able to use funds after a customer has paid for its goods

Question 3

What is trade credit?

Accepted Answer

A)  the credit that a firm extends to its customers 
B)  the amount a firm is owed by its customers who have received goods and services but have not yet paid for them 
C)  the percentage discount offered to a customer who opts to pay their account early 
D)  the amount that a firm owes its suppliers for goods which it has received but for which it has not yet paid. 
A)  the credit that a firm extends to its customers 
B)  the amount a firm is owed by its customers who have received goods and services but have not yet paid for them 
C)  the percentage discount offered to a customer who opts to pay their account early 
D)  the amount that a firm owes its suppliers for goods which it has received but for which it has not yet paid.

Question 4

Jen Industries had sales of $32 million this year and an average accounts receivable of $0.8 million per day. On average, how long does it take to collect on its sales?

Accepted Answer

A)  9 days 
B)  11 days 
C)  12 days 
D)  19 days 
A)  9 days 
B)  11 days 
C)  12 days 
D)  19 days

Question 5

The Holiday Corporation had sales of $450 million this year. Its accounts receivable balance averaged $30 million. How long, on average, does it take the firm to collect on its sales?

Accepted Answer

A)  15.0 days 
B)  24.3 days 
C)  12.2 days 
D)  16.7 days 
A)  15.0 days 
B)  24.3 days 
C)  12.2 days 
D)  16.7 days

Question 6

Working capital alters a firm's value by affecting its free cash flow.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is FALSE?

Accepted Answer

A)  After a firm decides on its credit standards, it must next establish its credit terms. 
B)  The decision of how much credit risk to assume plays a large role in determining how much money a firm ties up in its payables. 
C)  Knowledge of the payments pattern is also useful for forecasting the firm's working capital requirements. 
D)  An aging schedule categorizes accounts by the number of days they have been on the firm's books. 
A)  After a firm decides on its credit standards, it must next establish its credit terms. 
B)  The decision of how much credit risk to assume plays a large role in determining how much money a firm ties up in its payables. 
C)  Knowledge of the payments pattern is also useful for forecasting the firm's working capital requirements. 
D)  An aging schedule categorizes accounts by the number of days they have been on the firm's books.

What is collection float?

Which of the following best describes the availability float?

What is trade credit?

Jen Industries had sales of $32 million this year and an average accounts receivable of $0.8 million per day. On average, how long does it take to collect on its sales?

The Holiday Corporation had sales of $450 million this year. Its accounts receivable balance averaged $30 million. How long, on average, does it take the firm to collect on its sales?

Working capital alters a firm's value by affecting its free cash flow.

Which of the following statements is FALSE?

Corporate Finance and the Financial Manager

Introduction to Financial Statement Analysis

Time Value of Money: an Introduction

Time Value of Money: Valuing Cash Flow Streams

Interest Rates

Bonds

Stock Valuation

Investment Decision Rules

Fundamentals of Capital Budgeting

Stock Valuation: a Second Look

Risk and Return in Capital Markets

Systematic Risk and the Equity Risk Premium

The Cost of Capital

Raising Equity Capital

Debt Financing

Capital Structure

Payout Policy

Financial Modeling and Pro Forma Analysis

Short-Term Financial Planning

Option Applications and Corporate Finance

Mergers and Acquisitions

International Corporate Finance

Leasing

Insurance and Risk Management

Corporate Governance

Filters

Exam 19: Working Capital Management

What is collection float?

Which of the following best describes the availability float?

What is trade credit?

Jen Industries had sales of $32 million this year and an average accounts receivable of $0.8 million per day. On average, how long does it take to collect on its sales?

The Holiday Corporation had sales of $450 million this year. Its accounts receivable balance averaged $30 million. How long, on average, does it take the firm to collect on its sales?

Working capital alters a firm's value by affecting its free cash flow.

Which of the following statements is FALSE?

Corporate Finance and the Financial Manager

Introduction to Financial Statement Analysis

Time Value of Money: an Introduction

Time Value of Money: Valuing Cash Flow Streams

Interest Rates

Bonds

Stock Valuation

Investment Decision Rules

Fundamentals of Capital Budgeting

Stock Valuation: a Second Look

Risk and Return in Capital Markets

Systematic Risk and the Equity Risk Premium

The Cost of Capital

Raising Equity Capital

Debt Financing

Capital Structure

Payout Policy

Financial Modeling and Pro Forma Analysis

Short-Term Financial Planning

Option Applications and Corporate Finance

Mergers and Acquisitions

International Corporate Finance

Leasing

Insurance and Risk Management

Corporate Governance

Filters