1) Assume Green Leaf Nursery anticipated sales of $500 in this quarter. Accounts receivable at the beginning of the quarter was $300. Assuming a collection period of 30 days, which is the approximate cash collections amount for the quarter?;a) $550;b) $630;c) $250;d) $170;e) None of the above;2) Which of the following does not reduce collection float?;a) deposit collections at least daily.;b) make sure all checks it receives are properly dated and signed.;c) utilize the benefits of the Check Clearing Act for the 21st Century.;d) consolidate all lockboxes into one lockbox located near the home office.;3) You place an order for 100 units of inventory Part A at a unit price of $522. The supplier offers terms of 1/25, net 40. How much should you remit if you take the discount?;a) $52,200;b) $39,150;c) $51,678;d) None of the above;4) Auto Parts sells 1,600 electric parts per month 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?;a) $6,400 and $33,800;b) $3,200 and $33,800;c) $6,400 and $7,800;d) $3,200 and $7,800;e) None of the above;5) 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 EOQ?;a) 310 units;b) 300 units;c) 150 units;d) 155 units;e) None of the above;6) The operating cycle begins when _____ and ends when_____.;a) inventory is purchased, inventory is sold;b) inventory is purchased, payment is received for the sale of that inventory;c) inventory is purchased, the supplier of the inventory is paid;d) the sale of inventory occurs, payment is received for the sale of that inventory;e) the sale of inventory occurs, the supplier of the inventory is paid;TRUE OR FALSE;1) The optimal credit policy minimizes the total cost of granting credit.;2) Firms should avoid offering credit at all cost.;3) An increase in a firm's average collection period generally indicates that an increased number of customers are taking advantage of the cash discount.;4) The costs of the credit application process and the costs expended in the collection process are carrying costs of granting credit.;5) Capacity refers to the ability of a firm to meet its credit obligations out its operating cash flows.;6) The optimal credit policy is the policy that produces the largest amount of sales for a firm.;SHORT ANSWER;1) List three examples of short-term borrowing.
Paper#20086 | Written in 18-Jul-2015Price : $32