Question

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

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

True

False

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

True

False

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

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

True

False

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

1.
Inventory is highly perishable.

2.
False as inefficient utilization of cash remaining idle

3.
True

4.
All of the options

5.
False (It is possible to acquire a loan in USD outside US)

6.
It has a one- to two-year maturity. (It has less than 1 year maturity, typically 270 days)