Short-term Finance And Planning

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Questions Bank

Introduction to Corporate Finance
Financial Statements,Taxes,and Cash Flow
Working With Financial Statements
Long-Term Financial Planning and Growth
Introduction to Valuation: The Time Value of Money
Discounted Cash Flow Valuation
Interest Rates and Bond Valuation
Stock Valuation
Net Present Value and Other Investment Criteria
Making Capital Investment Decisions
Project Analysis and Evaluation
Some Lessons From Capital Market History
Return,Risk,and the Security Market Line
Cost of Capital
Raising Capital
Financial Leverage and Capital Structure Policy
Dividends and Payout Policy
Short-Term Finance and Planning
Cash and Liquidity Management
Credit and Inventory Management
International Corporate Finance
Behavioral Finance: Implications for Financial Management
Enterprise Risk Management
Options and Corporate Finance
Option Valuation
Mergers and Acquisitions
Leasing

All Questions

Question 1

Free

Multiple Choice

The length of time between the purchase of inventory and the receipt of cash from the sale of that inventory is called the:

Choose correct answer/s

operating cycle.

inventory period.

accounts receivable period.

accounts payable period.

cash cycle.

Check answer

Question 2

Free

Multiple Choice

The length of time that elapses between the day a firm purchases an inventory item and the day that item sells is called the:

Choose correct answer/s

operating cycle.

inventory period.

accounts receivable period.

accounts payable period.

cash cycle.

Check answer

Question 3

Free

Multiple Choice

The length of time between the sale of inventory and the collection of the payment for that sale is called the:

Choose correct answer/s

operating cycle.

inventory period.

accounts receivable period.

accounts payable period.

cash cycle.

Check answer

Question 4

Free

Multiple Choice

The length of time between the day a firm purchases an item from its supplier until the day that supplier is paid for that purchase is called the:

Choose correct answer/s

operating cycle.

inventory period.

accounts receivable period.

accounts payable period.

cash cycle.

Check answer

Question 5

Free

Multiple Choice

Central Supply purchased a toboggan for inventory this morning and paid cash for it.The time period between today and the day Central Supply will receive cash from the sale of this toboggan is called the:

Choose correct answer/s

operating cycle.

inventory period.

accounts receivable period.

accounts payable period.

cash cycle.

Check answer

Question 6

Multiple Choice

A graphical representation of the operating and cash cycles is called a(n):

Choose correct answer/s

operating chart.

cash flow time line.

production flow line.

component chart.

working time line.

To unlock the question

Question 7

Multiple Choice

Costs that increase as a firm acquires additional current assets are called _____ costs.

Choose correct answer/s

carrying

shortage

order

safety

trading

To unlock the question

Question 8

Multiple Choice

Costs that decrease as a firm acquires additional current assets are called _____ costs.

Choose correct answer/s

carrying

shortage

debt

equity

payables

To unlock the question

Question 9

Multiple Choice

Steve has estimated the cash inflows and outflows for his hardware store for next year.The report that he has prepared recapping these cash flows is called a:

Choose correct answer/s

pro forma income statement.

sales projection.

cash budget.

receivables analysis.

credit analysis.

To unlock the question

Question 10

Multiple Choice

Taylor Supply has made an agreement with its bank that it can borrow up to $10,000 at any time over the next year.This arrangement is called a(n):

Choose correct answer/s

floor loan.

open loan.

compensating balance.

line of credit.

bank note.

To unlock the question

Question 11

Multiple Choice

Money deposited by a borrower with the bank in a low or non-interest-bearing account as a condition of a loan agreement is called a:

Choose correct answer/s

compensating balance.

secured credit deposit.

letter of credit.

line of credit.

pledge.

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Question 12

Multiple Choice

Brustle's Pottery either factors or assigns all of its receivables to other firms.This is known as:

Choose correct answer/s

accounts receivable financing.

pledged financing.

capital funding.

daily funding.

capital financing.

To unlock the question

Question 13

Multiple Choice

Rose's Gift Shop borrows money on a short-term basis by pledging its inventory as collateral.This is an example of a(n):

Choose correct answer/s

debenture.

line of credit.

banker's acceptance.

working loan.

inventory loan.

To unlock the question

Question 14

Multiple Choice

Which one of the following increases cash?

Choose correct answer/s

granting credit to a customer

purchasing new machinery

making a payment on a bank loan

purchasing inventory

accepting credit from a supplier

To unlock the question

Question 15

Multiple Choice

Which of the following are uses of cash?
I)collecting a receivable
II)increasing inventory
III)obtaining a bank loan
IV)paying a supplier for previous purchases

Choose correct answer/s

I and III only

II and IV only

I and II only

I, II, and IV only

II, III, and IV only

To unlock the question

Question 16

Multiple Choice

Which one of the following will increase net working capital? Assume the current ratio is greater than 1.0.

Choose correct answer/s

paying a supplier for a previous purchase

paying off a long-term debt

selling inventory at cost

purchasing inventory on credit

selling inventory at a profit on credit

To unlock the question

Question 17

Multiple Choice

Which one of the following will decrease the net working capital of a firm? Assume the current ratio is greater than 1.0.

Choose correct answer/s

selling inventory at cost

collecting payment from a customer

paying a payment on a long-term debt

selling a fixed asset for book value

paying a supplier for the purchase of an inventory item

To unlock the question

Question 18

Multiple Choice

Which of the following are sources of cash?
I)decrease in inventory
II)increase in accounts receivable
III)repayment of a bond
IV)sale of preferred stock

Choose correct answer/s

I and III only

I and IV only

II and III only

I, II, and III only

I, III, and IV only

To unlock the question

Question 19

Multiple Choice

Which of the following will increase the operating cycle?
I)increasing the inventory turnover rate
II)increasing the payables period
III)decreasing the receivable turnover rate
IV)decreasing the inventory level

Choose correct answer/s

I only

III only

II and IV only

I and IV only

II and III only

To unlock the question

Question 20

Multiple Choice

Which one of the following equals the operating cycle?

Choose correct answer/s

cash cycle plus accounts receivable period

inventory period plus the accounts receivable period

inventory period plus the accounts payable period

accounts payable period minus the cash cycle

accounts payable period plus the accounts receivable period

To unlock the question

Short-term Finance And Planning

The length of time between the purchase of inventory and the receipt of cash from the sale of that inventory is called the:

The length of time that elapses between the day a firm purchases an inventory item and the day that item sells is called the:

The length of time between the sale of inventory and the collection of the payment for that sale is called the:

The length of time between the day a firm purchases an item from its supplier until the day that supplier is paid for that purchase is called the:

Central Supply purchased a toboggan for inventory this morning and paid cash for it.The time period between today and the day Central Supply will receive cash from the sale of this toboggan is called the:

A graphical representation of the operating and cash cycles is called a(n):

Costs that increase as a firm acquires additional current assets are called _____ costs.

Costs that decrease as a firm acquires additional current assets are called _____ costs.

Steve has estimated the cash inflows and outflows for his hardware store for next year.The report that he has prepared recapping these cash flows is called a:

Taylor Supply has made an agreement with its bank that it can borrow up to $10,000 at any time over the next year.This arrangement is called a(n):

Money deposited by a borrower with the bank in a low or non-interest-bearing account as a condition of a loan agreement is called a:

Brustle's Pottery either factors or assigns all of its receivables to other firms.This is known as:

Rose's Gift Shop borrows money on a short-term basis by pledging its inventory as collateral.This is an example of a(n):

Which one of the following increases cash?

Which of the following are uses of cash?I)collecting a receivableII)increasing inventoryIII)obtaining a bank loanIV)paying a supplier for previous purchases

Which one of the following will increase net working capital? Assume the current ratio is greater than 1.0.

Which one of the following will decrease the net working capital of a firm? Assume the current ratio is greater than 1.0.

Which of the following are sources of cash?I)decrease in inventoryII)increase in accounts receivableIII)repayment of a bondIV)sale of preferred stock

Which of the following will increase the operating cycle?I)increasing the inventory turnover rateII)increasing the payables periodIII)decreasing the receivable turnover rateIV)decreasing the inventory level

Which one of the following equals the operating cycle?

Which of the following are uses of cash?
I)collecting a receivable
II)increasing inventory
III)obtaining a bank loan
IV)paying a supplier for previous purchases

Which of the following are sources of cash?
I)decrease in inventory
II)increase in accounts receivable
III)repayment of a bond
IV)sale of preferred stock

Which of the following will increase the operating cycle?
I)increasing the inventory turnover rate
II)increasing the payables period
III)decreasing the receivable turnover rate
IV)decreasing the inventory level