FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 16: Short-Term Financial Planning

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

Which one of the following is a graphical representation of the operating and cash cycles?

A) Operations line
B) Production period
C) Cash flow time line
D) Inventory flow chart
E) Customer service line

F) A) and D)
G) A) and E)

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

Tri-City Grocers is a chain of grocery stores that just hired a new CFO.Which of the following actions would you expect this CFO to adopt given her statement that she wants to implement a more flexible financing policy for the firm? I.easing the credit terms given to customers II.increasing the amount of inventory carried by each grocery store III.borrowing funds to keep more cash available for store operations IV.decreasing the firms' investments in marketable securities

A) I and III only
B) II and IV only
C) I, II, and III only
D) II, III, and IV only
E) I, II, III, and IV

F) A) and B)
G) None of the above

Correct Answer

verified

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

The Cannon Ball has projected its first quarter sales at $11,200,second quarter sales at $10,900,and third quarter sales at $13,300.The firm's cost of goods sold is equal to 71 percent of the next quarter's sales.The accounts receivable period is 30 days and the accounts payable period is 60 days.At the beginning of the first quarter,the firm has an accounts receivable balance of $2,800 and an accounts payable balance of $6,300.The firm pays $1,500 a month in cash expenses and $200 a month in taxes.At the beginning of the first quarter,the cash balance is $530 and the short-term loan balance is zero.During the first quarter,the firm is planning on spending $2,600 for some new equipment.The firm maintains a minimum cash balance of $20.Assume each month has 30 days.What is the cumulative cash surplus (deficit) at the end of the first quarter,prior to any short-term borrowing?

Which one of the following statements about the operating cycle is correct?

Brown's Ferry Furniture Outlet has an accounts receivable period of 45 days and an accounts payable period of 96 days.The company turns over its inventory 2.8 times per year and marks up the inventory an average of 45 percent over its wholesale cost.What is the length of the firm's operating cycle?

The amount of time that a firm holds inventory in stock is referred to as which one of the following?

Which one of the following defines the cash cycle?

A flexible short-term financial policy will tend to have more of which of the following than a restrictive short-term financial policy will? I.uncollectable accounts receivable II.work stoppages for lack of raw materials III.carrying costs IV.obsolete or out-of-date inventory

Augustino's has the following estimated sales. Purchases are equal to 64 percent of the following quarter's sales.The accounts receivable period is 45 days and the accounts payable period is 60 days.Assume there are 30 days in each month.How much will the firm pay its suppliers in the third quarter?

How can a firm benefit from preparing a short-term financial plan?

Juno's has projected its first quarter sales at $42,000 and its second quarter sales at $45,000.The firm's cost of goods sold is equal to 70 percent of the next quarter's sales.The accounts receivable period is 30 days and the accounts payable period is 45 days.As of the beginning of the first quarter,the accounts receivable balance is $13,200 and the accounts payable balance is $14,500.The firm pays $1,800 a month in cash expenses and $100 a month in taxes.At the beginning of the first quarter,the cash balance is $380 and the short-term loan balance is zero.The firm maintains a minimum cash balance of $50.Assume each month has 30 days.What is the cumulative cash surplus (deficit) at the end of the first quarter,prior to any short-term borrowing?

Big Al's Meat Market has annual sales of $531,000 and cost of goods sold of $358,000.The profit margin is 4.8 percent and the accounts payable period is 41 days.What is the average accounts payable balance?

The Corner Store is a small-sized,general store which stocks a minimal level of basic supplies and offers gasoline to a rural community.Which one of the following types of credit is probably best-suited for financing this store's inventory?

Which one of the following is a use of cash?

To ensure an unsecured line of credit is used solely for short-term purposes,the loan arrangement frequently includes which one of the following?

Captain Kurt's Enterprises has a receivables turnover rate of 12.8,a payables turnover rate of 11.9,and an inventory turnover rate of 15.6.What is the length of the firm's operating cycle?

Shane's Music has a line of credit with a local bank that permits it to borrow up to $750,000 at any time.The interest rate is 0.28 percent per month.The bank charges compound interest and also requires that 4 percent of the amount borrowed be deposited into a non-interest-bearing account.How much interest will the firm pay if it needs $500,000 of cash for four months to pay its operating expenses?

The accounts receivable turnover rate for Big Men's Wear has gone from an average of 10.8 times to 10.2 times per year.How has this change affected the firm's accounts receivable period?

Dexter Companies has a conventional factoring arrangement with its local bank.Which one of the following would be a common characteristic of that type of financing arrangement?

Which of the following costs will tend to increase if a firm switches to a restrictive short-term financial policy from a flexible short-term policy? I.lost sales due to out-of-stock items II.inventory warehousing costs III.cash-outs IV.total annual order costs