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Southern New Hampshire FIN 610 Mid term




Question;1) It is most commonly assumed that the manager?s objective is to:a. Minimizing the price of the firm?s common stockb. Maximizing shareholder valuec. Maximize accounts receivablesd. Minimize accounts payables2) In adjusting a company's income statement to arrive at cash flow from operations, the proper treatment of the period's change in interest payable is:a. to ignore it, in that it represents a non-operating itemb. to add it to interest expensec. to subtract it from interest expensed. none of the above3) The number of site combinations evaluated by the complete enumeration algorithm is equal to:a. the number of bank sites n multiplied by the number of customer groups.b. the number of bank sites minus 1.c. 2 times the number of bank sites minus 1.d. 2 raised to the power of the number of bank sites minus 1.4) A given period's net cash from operations differs from that period's net income due toa. the depreciation expense, depletion, and amortization for the periodb. the change in accounts receivable over the periodc. the change in gross fixed assets over the periodd. a and be. a, b, and c5) Compensating balances have the following advantages EXCEPT:a. Have the effect of increasing total deposits and assetsb. Can be re-loaned to another customerc. Are directly comparable between banksd. Form a cushion6) Daylight overdrafts occur:a. When a bank?s Federal Reserve account is positive during the dayb. When a bank?s Federal Reserve account is negative during the dayc. Mainly because of international funds transfers of government securities transactionsd. ?a? and ?c?e. ?b? and ?c?7) The main benefits associated with a well-designed concentration system include:a. greater control over balancesb. economies of scalec. the absence of dual balancesd. ?a? and ?b?e. ?b? and ?c?8) Location, service quality and breadth, bank specialties, _____________, and _______________ are the major factors companies evaluate banks on when first establishing a banking relationship.a. bank/company fit, priceb. knowledge of the bank's cash management personnel, pricec. existence of a lending arrangement with the bank, bank/company fitd. bank size, how long the bank has been offering cash management services9) In order to justify the cost of using a wire transfer instead of an EDT (electronic depository transfer), your company must transfer a minimum of $200,000. The EDT has a one business day availability. If the EDT availability were two business days, what is the minimum transfer amount that would justify a wire transfer?a. $100,000b. $200,000c. $400,000d. the amount cannot be calculated without more information10) (An)_________ lockbox system is set up to use standardized invoice materials in large volumes.a. Retailb. wholesalec. networkd. ACH11) The financial statement approach involves:a. Estimating additional unit salesb. Estimating the cost of capital of additional investment in payablesc. Determining the additional bad debt lossd. ?a? and ?c?e. ?a?, ?b? and ?c?12) Checks drawn on banks that do not participate in a bank's local clearing house or exchange are calleda. remote itemsb. presentment itemsc. courier itemsd. transit items13) Decisions regarding when and how much to transfer in a concentration system are primarily complicated by:a. new federal regulationsb. higher banking fees for electronic transfersc. constantly changing reserve requirementsd. fluctuations in daily deposit amounts14) If a firm has purchases of $50,000, a starting inventory of $35,000 and the cost of goods sold is $45000, what is the dollar amount of its ending inventory?a. $40,000b. $80,000c. $85,000d. $130,000Purchases $50,000Add: Opening inventory $35,000Less: Cost of goods sold ($45,000)Ending inventory $40,00015) A bank service that offers detailed "checks outstanding" information along with the "checks paid" data (based on company-supplied check issue detail) is calleda. paid-only reconciliationb. comprehensive reconciliationc. range reconciliationd. full reconciliation16) Wire transfers represent a "real-time transfer of account balances." This implies that:a. there is no availability floatb. there is no charge to the user because no time is involved in the transfer processingc. there is very large dual balances in the "transferred from" and "transferred to" accountsd. the user does not have to keep compensating balances or reserve requirements for deposit accounts from which the transfer takes place17) The major paper-based payment (or funds transfer) mechanisms area. checks, CHIPsb. checks, ACHsc. checks, draftsd. checks, Western Union transfers18) A central location where representatives of area banks meet and settle balances with only one institution is termed a (an)a. automated clearing house (ACH)b. Regional Check Processing Centerc. clearing housed. communications and records center19) A ___________ draft is initiated by the payee, who has been approved to draw against the payor's account.a. payable throughb. sightc. preauthorizedd. depository20) Fed float occurs because the Feda. is no longer involved in the check clearing processb. cannot immediately transfer funds to the pay in its wire transfer systemc. grants check availability to the clearing bank before debiting the pay bankd. debits the pay bank for check amounts before granting availability to the clearing bank21) Guiding principles for corporate disbursement system decisions include each of the following EXCEPT:a. information should be accurate and timelyb. balances in disbursement accounts should be minimizedc. the value of payment timing should be maximizedd. individual service costs should be minimized22) Advantages of wire transfers include all of the following EXCEPT:a. best method for quickly moving large sums of moneyb. achieve immediate final transfer of moneyc. inexpensive relative to automated clearing house transactionsd. can be completed in manner of minutes23) Lambda is developed from a function of the likelihood that a firm will exhaust itsa. Its cash resourcesb. Its resources in total assetsc. Its liquid resourcesd. Its resources in fixed assets24) ?Double-counting?a. never occurs at small banksb. is consider unethical by cash managersc. never occurs on intra-bank transfersd. can never be created by lateral transfers25) In the 1970s, remote disbursing practices in the U.S. were best characterized asa. widely used by corporationsb. used by customers in remote locationsc. used only by companies with cash management expertised. very rarely used26) If a firm has a target inventory of $40,000, a starting inventory of $25,000 and the cost of goods sold is $35000, what is the dollar amount of its purchases?a. $15,000b. $20,000c. $50,000d. not enough information is provided.Cost of goods sold $35,000Add: Ending inventory $40,000Less: Opening inventory ($25,000)Purchases $50,00027) The necessary adjustment to the sales amount shown on the income statement to arrive at cash collections from customers is:a. subtract the change in accounts receivableb. add all the change in purchasesc. add the total amount of orders not yet shippedd. none of the above28) Several independent banks operating under a contractual agreement to provide lockbox services for each other's customers comprise:a. a lockbox consortiumb. multiple processing centersc. consolidated collection centersd. an ACH system29) The three basic components to collection or disbursement float for mailed checks are:a. mail float, Fed float, processing floatb. mail float, processing float, clearing floatc. mail float, bank float, processing floatd. mail float, bank float, clearing float30) _______________ is NOT an electronic means to transfer payments..a. wire transfersb. Time draftsc. EDTsd. Automated debits and credits31) Profitable and growing firms may run short on cash because:e. of rapid decrease in accounts receivablesf. of rapid growth in accrualsg. of rapid growth in accounts payableh. of spontaneous increases in receivables and inventories32) Which of the following statements is NOT true regarding the financial statement approach to evaluating financial alternatives?a. it includes a calculation of the anticipated revenues and expenses of the alternativesb. it includes a discounting of some of the alternatives' revenue and expense flowsc. it implicitly defines project riskiness as the project?s effect on liquidityd. it includes risk by portraying the company's ability to pay near-term obligations33) The three major delays which together comprise disbursement float are:a. mail float, processing float, availability floatb. mail float, availability float, clearing slippage floatc. mail float, processing float, clearance floatd. none of the above34) The ability of a company to augment its future cash flows, cover unforeseen cash needs, or take advantage of unforeseen opportunities, is referred to as:a. liquidityb. solvencyc. financial flexibilityd. the net liquidity balance35) _________ lockbox systems will likely be phased out as companies increasingly use electronic corporate trade payments.a. Retailb. Wholesalec. Networkd. ACH36) Days inventory held is a measure of thea. average time elapsing from the time an order is placed until it is shippedb. average inventory level multiplied by the number of days in the periodc. average length of time an inventoried item is in stock before it is soldd. none of the above37) Some corporations have been reluctant to use the ACH system more than they do becausea. the payor loses some disbursement float and controlb. the mail offers greater securityc. the ACH system reduces funds availability forecastingd. of the higher costs of banking, reconciliation and cash application38) For a one-shot short-term project, which of the following is a reason a financial analyst may NOT consider conducting an NPV analysis?a. money has time valueb. cash flows can usually be more accurately evaluatedc. difficulties in estimating the appropriate discount rated. ?a? and ?b?39) Compared to capital budgeting and capital structure decisions, consideration of the time value of money in short-term financial decision making (specially for ?one-shot? projects) is:a. Equally importantb. Less importantc. More importantd. Not a consideration at all40) Currently, the two basic methods by which cash managers transfer funds from accounts at one bank to accounts at another bank are:a. EDTs, and wire transfersb. overnight mail, and wire transfersc. Western Union transfers, and wire transfersd. courier, and EDTs41) Which of the following is an example of an electronic debit?a. a depository transfer checkb. an electronic depository transfer checkc. a wire transferd. draft42) The bank of first deposit will select the clearing mechanism to use based on all of the following except:a. the dollar amount of the checkb. the location of the draw bankc. the desires of the party that wrote the checkd. the availability schedule the bank would be granted for each clearing alternative43) A net increase in cash and equivalents from the 2002 statement of cash flows is equivalent toa. the cash generated by operations for 2002b. the change in cash and equivalents from 2001 to 2002 balance sheetsc. the change in retained earnings balances from 2001 to 2002 balance sheetsd. the net cash provided in 2002 by external funds44) Even now remote disbursing practices by corporations in the U.S. are best characterized asa. widely used by all corporationsb. widely used by large corporationsc. used by companies with cash management expertised. very rarely used45) _________ float is a measure which incorporates both the time lag and the dollar amount of remittances.a. Fedb. Dollar-dayc. Aggregated. Consolidated46) Sustainable growth rate is the sales growth rate thata. requires new outside debtb. can be supported by the firm?s current/ target financial policiesc. requires new external equityd. can be achieved by the firm?s marketing department


Paper#49198 | Written in 18-Jul-2015

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