Homework Answers
Answer: B. If the firm pays...firms cash cycle.
Cash cycle: the amount of time between purchasing for raw materials and converting into cash by selling the finished goods.
Operating cycle:
Amount of time= purchase raw material+Sell the product+ receive
cash from selling the product.
Even, If the firm pays cash for its inventory then the operating cycle is not equal to cash cycle.
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Which of the following statements is FALSE? OA. The firm's cash cycle is the average length...
Which of the following formulas will correctly calculate Net Working Capital? OA. Cash + Inventory +...
Which of the following formulas will correctly calculate Net Working Capital? OA. Cash + Inventory + Receivables Payables OB. Cash + Inventory + Receivables+ Payables OC. Cash + Inventory Receivables + Payables O D. Cash - Inventory+ Receivables Payables --
Cass & Company has the following data. What is the firm's cash conversion cycle? Inventory conversion...
Cass & Company has the following data. What is the firm's cash conversion cycle? Inventory conversion period = 52 days Receivables collection period 27 days Payables deferral period 16 days ○ A.74 B, 101 O C. 63 O D. 52 O E. 128
7. The longer the firm's accounts payable period, the: A. longer the firm's cash cycle. B....
7. The longer the firm's accounts payable period, the: A. longer the firm's cash cycle. B. greater the delay in the accounts receivable period. C. less the firm must invest in net working capital. D. shorter the firm's inventory period.
13. Romano Inc. has the following data. What is the firm's cash conversion cycle? Inventory Conversion...
13. Romano Inc. has the following data. What is the firm's cash conversion cycle? Inventory Conversion Period= Receivables Collection Period = Payables Deferral Period = 38 days 19 days 38 days
22. Which one of these statements is correct? A) A firm's cash cycle generally decreases when...
22. Which one of these statements is correct? A) A firm's cash cycle generally decreases when it switches from a cash to a credit policy, all else equal.. (B) A 2/15, net 30 credit policy tends to decrease the seller's receivables as compared to a straight net 30 policy C) When credit is granted, total revenues generally decrease if both the quantity sold and the price per unit increase D) Only the probability of default should be considered before granting...
22. Which one of these statements is correct? A) A firm's cash cycle generally decreases when...
22. Which one of these statements is correct? A) A firm's cash cycle generally decreases when it switches from a cash to a credit policy, all else equal. B) A 2/15, net 30 credit policy tends to decrease the seller's receivables as compared to a straight net 30 policy. C) When credit is granted, total revenues generally decrease if both the quantity sold and the price per unit increase. D) Only the probability of default should be considered before granting...
Cash conversion cycle American Products is concerned about managing cash efficiently. On the average, inventories have...
Cash conversion cycle American Products is concerned about managing cash efficiently. On the average, inventories have an age of 90 days, and accounts receivable are collected in 60 days. Accounts payable are paid approximately 30 days after they arise. The firm has annual sales of about $30 million. Assume there is no difference in the investment per dollar of sales in inventory, receivables, and payables; and, a 365-day year. a. Calculate the firm
Cass & Company has the following data. What is the firm's cash conversion cycle? 37. 45...
Cass & Company has the following data. What is the firm's cash conversion cycle? 37. 45 days 30 days 25 days Inventory conversion period Receivables collection period Payables de ferral period a. 28 days b. 32 days 35 days d. 45 days 50 days C. e.
Which of the following statements is FALSE? ns O A. Businesses can also obtain short-term financing...
Which of the following statements is FALSE? ns O A. Businesses can also obtain short-term financing by using secured loans, which are loans collateralized with short-term assets-most typically the firm's accounts receivables or inventory O B. In a factoring of accounts receivable arrangement, the firm sells receivables to the lender (i.e., the factor), and the lender agrees to pay the firm the amount due from its customers at the end of the firm's payment period. O c. If a factoring...
9. Which one of these statements is correct? A) A firm's cash cycle generally decreases when...
9. Which one of these statements is correct? A) A firm's cash cycle generally decreases when it switches from a cash to a credit policy, all else equal. B) A firm may have to increase its long-term borrowing if it decides to grant credit to its customers. C) Most customers will forgo the discount and pay at the end of the credit period. D) Only the cost of default should be considered before granting credit. E) Total revenues generally decrease...
Which of the following formulas will correctly calculate Net Working Capital? OA. Cash + Inventory + Receivables Payables OB. Cash + Inventory + Receivables+ Payables OC. Cash + Inventory Receivables + Payables O D. Cash - Inventory+ Receivables Payables --
Cass & Company has the following data. What is the firm's cash conversion cycle? Inventory conversion period = 52 days Receivables collection period 27 days Payables deferral period 16 days ○ A.74 B, 101 O C. 63 O D. 52 O E. 128
7. The longer the firm's accounts payable period, the: A. longer the firm's cash cycle. B. greater the delay in the accounts receivable period. C. less the firm must invest in net working capital. D. shorter the firm's inventory period.
13. Romano Inc. has the following data. What is the firm's cash conversion cycle? Inventory Conversion Period= Receivables Collection Period = Payables Deferral Period = 38 days 19 days 38 days
22. Which one of these statements is correct? A) A firm's cash cycle generally decreases when it switches from a cash to a credit policy, all else equal.. (B) A 2/15, net 30 credit policy tends to decrease the seller's receivables as compared to a straight net 30 policy C) When credit is granted, total revenues generally decrease if both the quantity sold and the price per unit increase D) Only the probability of default should be considered before granting...
22. Which one of these statements is correct? A) A firm's cash cycle generally decreases when it switches from a cash to a credit policy, all else equal. B) A 2/15, net 30 credit policy tends to decrease the seller's receivables as compared to a straight net 30 policy. C) When credit is granted, total revenues generally decrease if both the quantity sold and the price per unit increase. D) Only the probability of default should be considered before granting...
Cass & Company has the following data. What is the firm's cash conversion cycle? 37. 45 days 30 days 25 days Inventory conversion period Receivables collection period Payables de ferral period a. 28 days b. 32 days 35 days d. 45 days 50 days C. e.
Which of the following statements is FALSE? ns O A. Businesses can also obtain short-term financing by using secured loans, which are loans collateralized with short-term assets-most typically the firm's accounts receivables or inventory O B. In a factoring of accounts receivable arrangement, the firm sells receivables to the lender (i.e., the factor), and the lender agrees to pay the firm the amount due from its customers at the end of the firm's payment period. O c. If a factoring...
9. Which one of these statements is correct? A) A firm's cash cycle generally decreases when it switches from a cash to a credit policy, all else equal. B) A firm may have to increase its long-term borrowing if it decides to grant credit to its customers. C) Most customers will forgo the discount and pay at the end of the credit period. D) Only the cost of default should be considered before granting credit. E) Total revenues generally decrease...
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