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FINC400 quiz 3

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Question;FINC400 week 3 quizThe quiz is accessible once and is available for the duration of 1.5-hours. Please do not exit from the quiz unless it has been completed, as it will not be accessible again.Question 1 of 254.0 PointsAs a general rule, it is desirable to finance the permanent assets, including "permanent current assets", with long-term debt and equity.TrueFalseQuestion 2 of 254.0 PointsShort-term interest rates are generally lower than long-term interest rates.A. TrueB. FalseQuestion 3 of 254.0 PointsCommercial bank term loansA.usually carry fixed interest rates.B.are very short-term in nature.C.are offered to superior credit applicants.D.both b and c.Question 4 of 254.0 PointsDun & Bradstreet is known for providingA.interest rate information to cash managers.B.credit scoring reports that rank a company's payment habits relative to its peer group.C.cash management systems to corporate treasurers.D.consumer credit reports to credit card companiesQuestion 5 of 254.0 PointsSmall companies finance a relatively greater proportion of their assets through trade credit than do larger concerns.A. TrueB. FalseQuestion 6 of 254.0 PointsA financial executive devotes the most time toA.Long-range planning.B.Capital budgeting.C.Short-term financing.D.Working capital management.Question 7 of 254.0 PointsShort-term financing is risky because of the possibility of rising short-term rates and the inability of always being able to refund short-term debt.A. TrueB. FalseQuestion 8 of 254.0 PointsFrom the banker's point of view, short-term bank credit is an excellent way of financingA.fixed assets.B.permanent working capital needs.C.repayment of long-term debt.D.seasonal bulges in inventory and receivables.Question 9 of 254.0 PointsOne of the first considerations in cash management isA.to have as much cash as possible on hand.B.synchronization of cash inflows and cash outflows.C.profitability.D.to put any excess cash into accounts receivable.uestion 10 of 254.0 PointsCash balances are usually determined by the amount of cash flowing through the firm on a yearly basis.TrueFalseSeasonal production allows for maximum efficiency in machinery and manpower use. A. True B. FalseQuestion 12 of 254.0 PointsEven during slack loan periods, banks will never loan out money at an interest rate lower than the prime rate because the prime rate is their best rate.A. TrueB. FalseQuestion 13 of 254.0 PointsThe use of cash budgeting proceduresA.helps the firm plan its current asset levels for a given production plan.B.makes managing inventory easier under seasonal production.C.illustrates fluctuating levels of current assets for a given production plan.D.all of these are correct.Question 14 of 254.0 PointsPermanent current assets are not similar to fixed assets because they are fully liquidated within the year.A. TrueB. FalseQuestion 15 of 254.0 PointsModos Company has deposited $3,500 in checks received from customers. It has written $1,400 in checks to its suppliers. The initial bank and book balance was $600. If $1,600 of its customer?s checks have cleared but only $600 of its own, calculate its float.A.$1,200B.$1,100C.$300D.$700Question 16 of 254.0 PointsA Just-In-Time (JIT) inventory management program has all but which of the following requirements?A.quality productionB.large safety stocksC.close ties between suppliers, manufacturers, and customersD.minimizing inventory levelsQuestion 17 of 254.0 PointsBecause of changing economic conditions, it is difficult for companies such as Dun & Bradstreet to devise models predicting payment problems and probability of bankruptcy 12 months in the future.A. TrueB. FalseQuestion 18 of 254.0 PointsA trade discount is a percentage reduction from the invoice price given for purchasing certain minimum quantities.A. TrueB. FalseQuestion 19 of 254.0 PointsThe Truth in Lending law is designed to protectA.corporate borrowers.B.banks.C. consumers.D.investors in municipal bonds.Question 20 of 254.0 PointsA "normal" term structure of interest rates would depictA.short-term rates higher than long-term rates.B.long-term rates higher than short-term rates.C.no general relationship between short- and long-term rates.D.Intermediate rates (1-5 years) lower than both short-term and long-term rates.Question 21 of 254.0 PointsBank loans to business firmsA.are usually short-term in nature.B.are preferred by the banker to be self-liquidating.C.may require compensating balances.D.all of these.Question 22 of 254.0 PointsNormally, permanent current assets should be financed byA.long-term funds.B.short-term funds.C.borrowed funds.D.internally generated funds.Question 23 of 254.0 PointsWhich of the following is not a valid quantitative measure for accounts receivable collection policies?A.average collection periodB.aging of accounts receivablesC.ratio of debt to equityD.ratio of bad debts to credit salesuestion 24 of 254.0 PointsWorking capital management is relatively unimportant for the small business.TrueFalseQuestion 25 of 254.0 PointsFor most firms, the primary motive for holding cash is the transaction motive.A. TrueB. False

 

Paper#51539 | Written in 18-Jul-2015

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