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5. (TCO 2) Which of the following statements is fa...




5. (TCO 2) Which of the following statements is false? Select all that apply: (Points: 3) The optimal credit policy minimizes the total cost of granting credit. Firms should avoid offering credit at all cost. An increase in a firm's average collection period generally indicates that an increased number of customers are taking advantage of the cash discount. The costs of the credit application process and the costs expended in the collection process are carrying costs of granting credit. Character refers to the ability of a firm to meet its credit obligations out its operating cash flows. 6. (TCO 2) You place an order for 100 units of inventory Part A at a unit price of $522. The supplier offers terms of 3/25, net 40. How much should you remit if you take the discount? (Points: 3) $52,200 $50,634 $51,678 None of the above 7. (TCO 2) Auto Parts sells 1,600 electric parts per week and then reorders another 1,600 parts. If the relevant carrying cost per electric part is $4 and the fixed order cost is $650, what is the total carrying cost and the restocking cost, respectively? (Points: 3) $6,400 and $33,800 $3,200 and $33,800 $6,400 and $7,800 $6,400 and $33,000 None of the above 8. (TCO 2) Company ABC has expected sales of 12,000 units this year, an ordering cost of $6 per order and carrying costs of $1.60 per unit. What is the average inventory? (Points: 3) 310 units 300 units 150 units 155 units None of the above 9. (TCO 2) The ___________ is the time that elapses between the sale of an item and the receipt of payment for that sale. (Points: 3) accounts receivable period accounts payable period cash cycle customer operating cycle None of the above 10. (TCO 2) List three examples of short-term borrowing. (Points: 3)


Paper#10056 | Written in 18-Jul-2015

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