Question

1- Assuming level production throughout the year, and assuming receivables are collected in two equal installments over the two months subsequent to the sales period, developing the related areas of the cash budget requires which of the following steps?

		Calculate beginning accounts receivable balance.
		Calculate COGS.
		Estimate monthly net cash flow and bank borrowing or repayments.
		Calculate ending inventory.

2-

Retail companies like Target and Limited Brands exhibit sales patterns that are most typically influenced by

		cyclical economic indicators.
		competitive prices.
		seasonality.
		sales promotions.

3-

Which of the following is not a condition under which a prudent manager would accept some risk in financing?

		Predictable cash-flow patterns
		Inventory is highly perishable.
		The price of inventory is stable.
		Basic access to capital markets

4-

Which of the following is a reason for diminishing liquidity in modern corporations?

		Just-in-time inventory programs
		Better utilization of cash via computers
		Increased use of point-of-sale terminals
		All of the options are reasons for diminishing liquidity.

5-

A Just-In-Time (JIT) inventory management program has all but which of the following requirements?

		Quality production
		Large safety stocks
		Close ties between suppliers, manufacturers, and customers
		Minimizing inventory levels

6- For most modern corporations, the more cash they have, the better off they are.

True

False

7-

Just-in-time inventory management typically pushes the cost of holding inventory from the manufacturer to the manufacturer's suppliers.

True

False

8-

Characteristics of a money market deposit account include

		a lower risk than money market funds.
		insurance by federal agencies.
		generally a limit of three deposits or withdrawals per month.
		All of the options

9-

It is difficult to acquire a loan in U.S. dollars outside the United States.

True

False

10-

Which of the following is NOT a characteristic of commercial paper?

		It is issued by large firms.
		It has a one- to two-year maturity.
		Its rates are usually below prime rates on business loans.
		All of these options are commercial paper characteristics.

Answer 1

Ans 1) Estimate monthly net cash flow and bank borrowing or repayments.

Ans 2) seasonality.

Ans 4) All of the options are reasons for diminishing liquidity.

Ans 5) Large safety stocks

A Just-In-Time (JIT) inventory management program has the following requirements Quality production, Close ties between suppliers, manufacturers, and customers, Minimizing inventory levels