Tryst Energy Inc has an average age of inventory of 65 days, an average collection period of 60 days and an average payment period of 65 days. The firm’s total annual outlays for operating cycle investments are $3.65 million. Assuming a 365-day year, how much financing is required to support its cash conversion cycle? A) […]
In 1982, the SEC adopted Rule 415, also known as the _ rule, which allows qualifying firms to register a bond offering and then sell it either as a whole or piecemeal at any time over several years. a. delayed registration b. deferred registration c. shelf registration d. piecemeal registration ANSWER C
Cash disbursements (expenditures) are not closely tied to the sales forecast as the sales forecasts are not typically used for scheduling production. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Cash disbursements (expenditures) ARE CLOSELY tied to the sales forecast as the sales forecasts ARE TYPICALLY used for scheduling […]
The timing and the amount of cash flow is important to the financial manager and estimating these cash outflows is part of the ________ process A) income forecasting B) revenue forecasting C) cash forecasting D) cost forecasting ANSWER Answer: C
Managers know that for cash and credit sales completed in one month that all will be recorded as sales revenue in that month, but that the actual cash flow will take place over a longer period of time because of ________. A) credit sales B) erosion C) foreclosure D) transit time ANSWER Answer: […]
Which one of the costs below is NOT a production cost? A) The wages paid to workers B) The raw materials for manufacturing products C) The dividends paid to shareholders D) The shipping costs that get the product to the customer ANSWER Answer: C Explanation: C) Production costs include, among other items, the […]
The optimal capital structure is the one that balances ________. A) return and risk factors in order to maximize profits B) return and risk factors in order to maximize earnings per share C) return and risk factors in order to maximize market value D) return and risk factors in order to maximize dividends […]
Under a conservative funding strategy, the firm funds both its seasonal and its permanent requirements with long-term debt. Indicate whether the statement is true or false ANSWER TRUE
The _ provision in a corporate bond contract requires the firm to retire a specified percentage of the bonds each year, typically after a deferment period of 5 to 10 years. a. sinking fund b. call c. put d. conversion ANSWER A
The ________ schedule will usually be based on the ________ forecast. A) sales; production B) production; sales C) forecast; scheduled D) production; cash ANSWER Answer: B
