A firm has an operating cycle of 120 days, an average collection period of 40 days, and an average payment period of 30 days. The firm’s average age of inventory is ________ days. A) 80 B) 50 C) 90 D) 70 ANSWER A
Date: September 19th, 2020
The EBIT-EPS analysis tends to concentrate on maximization of earnings rather than maximization of owners’ wealth. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A firm has a cash conversion cycle of 80 days, an average collection period of 25 days, and an average age of inventory of 70 days. Its operating cycle is ________ days. A) 95 B) 105 C) 60 D) 130 ANSWER A
Date: September 19th, 2020
In January, 2002, Jones Company issues a pure-discount bond with a promised payment of X=$1000 that matures in T=5 years. The market price of the bond is P=$777 . The bond is default- risky. Specifically, the probability is 0. 8 that Jones Company will pay the full amount of X at maturity, and is 0.2 […]
Date: September 19th, 2020
The goal of the daily management of cash is to have sufficient cash on hand to pay the bills without carrying ________. A) excess debt B) excess sunk costs C) excess depreciation D) excess cash ANSWER Answer: D
Date: September 19th, 2020
TRUE or FALSE. Underwriter spreads on corporate bonds reflect substantial economies of scale. a. TRUE b. FALSE ANSWER A
Date: September 19th, 2020
The ________ of a firm is the amount of time required for a company to convert cash invested in its operations to cash received as a result of its operations. A) cash turnover B) cash conversion cycle C) average age of inventory D) average collection period ANSWER B
Date: September 19th, 2020
In the daily planning for cash or the cash forecast, we want to hone in on the management of cash as it applies to the ________ of the company. A) short-term borrowing and long-term investing B) long-term borrowing and short-term investing C) short-term borrowing and short-term investing D) long-term borrowing and long-term investing […]
Date: September 19th, 2020
Briefly describe the costs included in the production process. What will be an ideal response? ANSWER Answer: Production costs include the wages paid to workers, the raw materials for manufacturing products, the overhead (such as electricity, water, plant space, and so on), and the shipping costs that get the product to the customer.
Date: September 19th, 2020
We can condense the items that require cash outflow into basic categories. Which of the below is a basic category? A) Wages (but not commissions) B) Accounts receivable C) Long-term financing expenses (interest payments, dividend payments, issuing costs of debt and equity) D) All of these ANSWER Answer: C Explanation: C) We can […]
Date: September 19th, 2020
