A firm has an average age of inventory of 60 days, an average collection period of 45 days, and an average payment period of 30 days. The firm’s operating cycle is ________ days. A) 75 B) 105 C) 90 D) 135 ANSWER B
Date: September 19th, 2020
Which of the following elements is required for the calculation of cash conversion cycle? A) current assets ratio B) average cost of goods sold C) average collection period D) cash flows from operations ANSWER C
Date: September 19th, 2020
TRUE or FALSE: VCs are rarely involved in the governance and management of a venture that they finance. a. TRUE b. FALSE ANSWER B
Date: September 19th, 2020
A firm has interest expense of $145,000, preferred dividends of $25,000, and a tax rate of 40 percent. The firm’s financial breakeven point is ________. A) $ 25,000 B) $170,000 C) $186,667 D) $145,000 ANSWER C
Date: September 19th, 2020
When estimating the impact of a capital project on a pro forma balance sheet, one should note that financing can come from a variety of sources. The resources can include increases in current assets and long-term assets. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: When estimating the impact […]
Date: September 19th, 2020
A pro forma statement sets out the financial predictions of a company on an “as if” basis—that is, it projects future performance based on a set of operating and sales facts. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: A pro forma statement sets out the financial predictions of […]
Date: September 19th, 2020
The VC industry did not become a major force in financing ventures until which TWO problems were solved? a. informational asymmetry and principal-agent problems b. legislation allowed institutional investors to provide significant capital backing, and an effective legal-liability arrangement for contributing parties was devised c. contracting problems with the venture and compensation for executives d. […]
Date: September 19th, 2020
Pro forma statements are tools used by the company to help highlight areas that the company needs to avoid as part of its short-term financial planning. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Pro forma statements are tools used by the company to help highlight areas that the […]
Date: September 19th, 2020
Other factors remaining constant, a decrease in the average age of inventory will result in ________. A) a decrease in the average collection period B) a decrease in the cash conversion cycle C) an increase in the cash conversion cycle D) an increase in the average collection period ANSWER B
Date: September 19th, 2020
Pro forma statements are tools used by the company to forecast its profitability and obligations for the coming year. Indicate whether the statement is true or false. ANSWER Answer: TRUE
Date: September 19th, 2020
