Question 1

Which one of the following statements is correct concerning the cash cycle?

Accepted Answer

A)  The longer the cash cycle, the more likely a firm will need external financing.
B)  Increasing the accounts payable period increases the cash cycle.
C)  A positive cash cycle is preferable to a negative cash cycle.
D)  The cash cycle can exceed the operating cycle if the payables period is equal to zero.
E)  Offering early payment discounts to customers will tend to increase the cash cycle.F) C) and E)
G) B) and D)

Question 2

Which one of the following is indicative of a short-term restrictive financial policy?

Accepted Answer

A)  purchasing inventory on an as-needed basis
B)  granting credit to all customers
C)  investing heavily in marketable securities
D)  maintaining a large accounts receivable balance
E)  keeping inventory levels highF) B) and D)
G) A) and D)

Question 3

Workout Together has projected the following sales for the coming year: 
 Sales in the year following this one are projected to be 18 percent greater in each quarter.Assume the firm places orders during each quarter equal to 35 percent of projected sales for the next quarter.How much will the firm pay to its suppliers in Quarter 2 if its accounts payable period is 60 days?

Accepted Answer

A)  $212.67
B)  $241.33
C)  $291.67
D)  $351.33
E)  $356.67F) A) and E)
G) B) and E)

Question 4

Which one of the following actions will tend to increase the accounts receivable period? Assume the accounts receivable period is currently 34 days.

Accepted Answer

A)  tightening the standards for granting credit to customers
B)  refusing to grant additional credit to any customer who pays late
C)  increasing the finance charges applied to all customer balances outstanding over thirty days
D)  granting discounts for cash sales
E)  eliminating the discount for early payment by credit customersF) B) and E)
G) A) and B)

Question 5

The length of time between the purchase of inventory and the receipt of cash from the sale of that inventory is called the:

Accepted Answer

A)  operating cycle.
B)  inventory period.
C)  accounts receivable period.
D)  accounts payable period.
E)  cash cycle.F) A) and E)
G) B) and D)

Question 6

Which two of the following are most apt to cause a cash-out for a firm that is generally financially sound?
I.fixed expenses
II.fixed asset purchases
III.flexible financing policy
IV.highly seasonal sales

Accepted Answer

A)  I and III only
B)  II and IV only
C)  III and IV only
D)  I, II, and III only
E)  II, III, and IV onlyF) A) and E)
G) C) and D)

Question 7

Which one of the following increases cash?

Accepted Answer

A)  granting credit to a customer
B)  purchasing new machinery
C)  making a payment on a bank loan
D)  purchasing inventory
E)  accepting credit from a supplierF) A) and C)
G) C) and E)

Question 8

The length of time between the sale of inventory and the collection of the payment for that sale is called the:

Accepted Answer

A)  operating cycle.
B)  inventory period.
C)  accounts receivable period.
D)  accounts payable period.
E)  cash cycle.F) A) and B)
G) A) and C)

Question 9

Josie's Craft Shack has a beginning cash balance for the quarter of $1,126.The store has a policy of maintaining a minimum cash balance of $1,000 and is willing to borrow funds as needed to maintain that balance.Currently,the firm has a loan balance of $480.How much will the store borrow or repay if the net cash flow for the quarter is -$280?

Accepted Answer

A)  $0
B)  $28
C)  $126
D)  $154
E)  $280F) C) and D)
G) A) and E)

Exam 18: Short-Term Finance and Planning

Correct Answer
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Which two of the following are most apt to cause a cash-out for a firm that is generally financially sound? I.fixed expenses II.fixed asset purchases III.flexible financing policy IV.highly seasonal sales

Correct Answer
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Which one of the following increases cash?

Correct Answer
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Which one of the following actions will tend to increase the accounts receivable period? Assume the accounts receivable period is currently 34 days.

Correct Answer
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Which one of the following statements is correct concerning the cash cycle?

Correct Answer
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The length of time between the purchase of inventory and the receipt of cash from the sale of that inventory is called the:

Correct Answer
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Correct Answer
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Which one of the following is indicative of a short-term restrictive financial policy?

Correct Answer
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The length of time between the sale of inventory and the collection of the payment for that sale is called the:

Correct Answer
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Exam 18: Short-Term Finance and Planning

Correct AnswerverifiedShow Answer

Which two of the following are most apt to cause a cash-out for a firm that is generally financially sound? I.fixed expenses II.fixed asset purchases III.flexible financing policy IV.highly seasonal sales

Correct AnswerverifiedShow Answer

Which one of the following increases cash?

Correct AnswerverifiedShow Answer

Which one of the following actions will tend to increase the accounts receivable period? Assume the accounts receivable period is currently 34 days.

Correct AnswerverifiedShow Answer

Which one of the following statements is correct concerning the cash cycle?

Correct AnswerverifiedShow Answer

The length of time between the purchase of inventory and the receipt of cash from the sale of that inventory is called the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which one of the following is indicative of a short-term restrictive financial policy?

Correct AnswerverifiedShow Answer

The length of time between the sale of inventory and the collection of the payment for that sale is called the:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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