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Homework answers / question archive / Bellevue University MBA 620 Quiz 4 1)All else the same, a firm would prefer a a

Bellevue University MBA 620 Quiz 4 1)All else the same, a firm would prefer a a

Management

Bellevue University

MBA 620

Quiz 4

1)All else the same, a firm would prefer a

a. lower cash turnover, because this indicates a more efficient use of cash b. higher cash turnover, because this implies a more efficient use of cash

c.             lower cash turnover, because this would lead to greater profits

d.            higher cash turnover, because the cash conversion cycle should be higher

e.            higher cash turnover, because this implies a firm has more cash

2.            Which of the following refers to the time delay between the start & finish of a cash flow process along the cash flow timeline?

a.            Float (page # 218 on the book)

b.            sink

c.             duration

d.            maturity

e.            operating cycle

3.            The activities, as well as the time intervals from when a firm initially purchases resources, converts them into goods and services, sells those products and ultimately collects cash from the sales is commonly known as the

a.            production-collection cycle

b.            treasury cycle

c.             funds invested cycle

d.            float cycle

e.            operating cycle page #214

4.            The time delay from a supplier's invoice being received until the funds are debited from the paying firm's account is?

a.            disbursement float Page # 222

b.            payment float

c.             invoicing float

d.            collection float

e.            root beer float

5.            Which of the following would tend to shorten a firm’s cash conversion cycle (review all alternatives before answering)?

a.            implementing new production technology which would reduce the time of the firm’s production process

b.            tightening the firm’s credit standards thereby reducing sales on credit

c.             loosening the firm’s credit standards thereby increasing sales on credit

d.            delaying payments to the firm’s suppliers e. a, b and d

f.             a and b only

6.            Which of the following accounts would typically be characterized as a “spontaneous account” in regards to changing sales levels?

a.            bank term loans

b.            accounts receivable

c.             plant and equipment

d.            long term debt

 

e.            outstanding equity

7.            Trade credit is a tool.

a.            collection

b.            disbursement

c.             lockbox

d.            collateral

e.            sales (see page # 235)

8.            Fill in the blanks: Sales managers would generally prefer a            current asset investment strategy. Financial managers would generally prefer a                         current asset investment strategy.

a.            relaxed,               restrictive (respectively) page #213

b.            restrictive, relaxed

c.             relaxed,               relaxed

d.            restrictive, restrictive

e.            this is an irrelevant question, since sales managers do not care about a firm’s current asset investment strategy

9.            A firm's account receivable balance pattern is as follows:

95% is sales from current month 70% is sales from 1 month prior 10% is sales from 2 months prior 0% is sales from 3 months prior Sales are as follows:

Feb.       $430

Mar.      $500

Apr.       $750

May       $600

June      $400

The estimated accounts receivable balance at the end of June is (Hint: this assumes similar information provided in Exhibit 9.2 of text.)

a. $400

b. $561 c. $875

d. $670

e. insufficient information to calculate

10.          A firm receives an invoice for $15,000 worth of supplies it purchased. The invoice states the following trade terms: "2/10 Net 30". The terms imply that what amount must be paid by what day? (Please read all alternatives & select the best response.)

a.            $15,000 by 30th day

b.            $13,500 by 30th day

c.             $13,500 by 2nd day

d.            $14,700 by 30th day

e.            $14,700 by 10th day

 

f.             either b or e g. either a or e

h. none of the above are accurate

 

 

 

 

 

 

 

 

 

 

 

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