Question

Financial managers are interested in accelerating both cash inflows and cash disbursements.

Group of answer choices

True

False

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Question 21 pts

Which of the following types of accounts can be both a provider for precautionary and compensating balance requirement funds?

Group of answer choices

Indirect cost account

Minimum demand deposit

Maximum demand deposit

Reimbursement account

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Question 31 pts

Treasury bills are popular money market instruments even though they do not offer which of the following?

Group of answer choices

High yield

Price stability

Flexible maturities

Good marketability

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Question 41 pts

What is another way for a company to account for unexpected expenses instead of holding on to a large amount of cash?

Group of answer choices

Short-term credit

Sell more shares to raise capital

Sell inventory at a significant discount

Long-term credit

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Question 51 pts

Where do smaller companies typically invest surplus cash?

Group of answer choices

Preferred stock

Money market mutual funds

Treasury bills

Certificates of deposit

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Question 61 pts

Assume that a company is considering an investment that costs $50,000, has a life span of ten years, and has a calculated NCB of $7,000 for each of those years. Assuming a 9 percent discount rate, what is the NPV of the investment?

Group of answer choices

$(5,076.10)

$(848.80)

$4,145.50

$245.20

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Question 71 pts

The Herford candy company was evaluating the option of buying a machine to increase production. The cost of the new machine was $2,400; it had a life of eight years, had zero salvage value, and was depreciated for tax purposes on a straight-line basis over the life of the machine. The corporate income tax was 40 percent and the company had a depreciation amount of $200 on its existing assets. The company implemented a thorough analysis of revenues and benefits both before and after the purchase. Find the annual incremental net cash flow resulting from the investment in the new machine for the company.

	Without new machine	With new machine
Revenues	$10,000	$12,500
Expenses other than depreciation	$6,000	$7,500

Group of answer choices

$550

$640

$600

$420

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Question 81 pts

Which of the following evaluation methods calculates the time it takes to make up the company’s initial investment in a project?

Group of answer choices

Accounting rate of return

Payback method

Average rate of return

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Question 91 pts

A common value for the marginal cost of capital is the average of the costs of the types
of capital used to finance the company.

Group of answer choices

True

False

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Question 101 pts

What can companies use to overcome the difficulty of having various projects with varying rates of return requirements?

Group of answer choices

Use a graduated scale for rates of return for different project types

Set a single project hurdle rate slightly above mid-range

Require each manager to advocate for his/her project

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Question 111 pts

A negative additional financing needed (AFN) amount means the company will have funds to use for other purposes.

Group of answer choices

True

False

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Question 121 pts

Which of the following is NOT a way to close a financing gap discovered during a forecasting project?

Group of answer choices

Lower assets

Increase prices

Lower liabilities

Lower costs

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Question 131 pts

Valuation involves estimating profits.

Group of answer choices

True

False

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Question 141 pts

What can the analyst set once forecasts and plans have been completed and integrated?

Group of answer choices

Ratios

Relationships

Benchmarks

Funding opportunities

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Question 151 pts

Why are cash flows resulting from a forecast discounted back to the present value?

Group of answer choices

To determine the investor’s required rate of return

To determine the enterprise value

To determine the amount of outstanding debt

To determine the cost of capital

Answer 1

1.Answer:- False

An efficient cash management will aim at maximizing the availability of cash inflows by decentralizing collections and decelerating cash outflows by centralizing disbursements.

So financial managers are interested in accelerating cash inflows,but not outflows.