Quiz
B3- Working Capital Management
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Fragen in diesem Quiz (21)
1A working capital technique, which delays the outflow of cash, is:
- AA draft.
- BA lock-box system.
- CCompensating balances.
- DFactoring.
2Which one of the following would increase the working capital of a firm?
- APayment of a thirty-year mortgage payable with cash.
- BRefinancing of accounts payable with a two-year note payable.
- CCash collection of accounts receivable.
- DCash payment of accounts payable.
3The optimal level of inventory would be affected by all of the following, except the:
- ACost of placing an order for merchandise.
- BCost per unit of inventory.
- CLead time to receive merchandise ordered.
- DCurrent level of inventory.
4As a company becomes more conservative with respect to working capital policy, it would tend to have a (n):
- ADecrease in the quick ratio.
- BIncrease in the ratio of current assets to noncurrent assets.
- CDecrease in the operating cycle.
- DIncrease in the ratio of current liabilities to noncurrent liabilities.
5Which of the following ratios is appropriate for the evaluation of accounts receivable?
- AReturn on total assets
- BCollection to debt ratio.
- CDays sales outstanding.
- DCurrent ratio.
6Green, Inc., a financial investment-consulting firm, was engaged by Maple Corp. to provide technical support for making investment decisions. Maple, a manufacturer of ceramic tiles, was in the process of buying Bay, Inc., its prime competitor. Green's financial analyst made an independent detailed analysis of Bay's average collection period to determine which of the following?
- ALiquidity.
- BFinancing.
- CReturn on equity.
- DOperating profitability.
7Which of the following inventory management techniques focuses on a set of procedures to determine inventory levels for demand-dependent inventory types such as work-in-process and raw materials?
- ACycle counting.
- BEconomic order quantity.
- CMaterials requirements planning.
- DSafety stock reorder point.
8In inventory management, the safety stock will tend to increase if the:
- ACarrying cost increases.
- BVariability of lead-time increases.
- CFixed order cost decreases.
- DCost of running out of stock decreases.
9The Stewart Co. uses the Economic Order Quantity (EOQ) model for inventory management. A decrease in which one of the following variables would increase the EOQ?
- ACarrying costs.
- BSafety stock level.
- CCost per order.
- DQuantity demanded
10Why would a firm generally choose to finance temporary assets with short-term debt?
- AA firm that borrows heavily long term is more apt to be unable to repay the debt than a firm that borrows heavily short term.
- BFinancing requirements remain constant.
- CMatching the maturities of assets and liabilities reduces risk.
- DShort-term interest rates have traditionally been more stable than long-term interest rates.
11The amount of inventory that a company would tend to hold in stock would increase as the:
- AVariability of sales decreases.
- B.Cost of running out of stock decreases.
- CLength of time that goods are in transit decreases.
- DCost of carrying inventory decreases.
12The working capital financing policy that subjects the firm to the greatest risk of being unable to meet the firm's maturing obligations is the policy that finances:
- APermanent current assets with long-term debt.
- BFluctuating current assets with short-term debt.
- CPermanent current assets with short-term debt.
- DFluctuating current assets with long-term debt.
13Which of the following inventory management approaches orders at the point where carrying costs equate nearest to restocking costs in order to minimize total inventory cost?
- AEconomic order quantity.
- BMaterials requirements planning.
- CJust-in-time.
- DKanban inventory control.
14Which of the following assumptions is associated with the economic order quantity formula?
- AThe purchase cost per unit will vary based on quantity discounts.
- BPeriodic demand is known.
- CThe carrying cost per unit will vary with quantity ordered.
- DThe cost of placing an order will vary with quantity ordered.
15Which of the following effects would a lockbox most likely provide for receivables management?
- AMinimized disbursement float.
- BMaximized collection float.
- CMaximized disbursement float.
- DMinimized collection float.
16Each of the following items is included when computing a firm's target cash conversion cycle, except the:
- AInventory conversion period
- BCash discount period.
- CPayables deferral period.
- DAverage collection period.
17Cash Co. is seeking to establish better controls over its cash receipts. As part of its strategy, the company establishes a single bank as its central depository. This technique is known as:
- ACompensating balances.
- BConcentration banking.
- CZero balance account banking.
- DLockbox banking.
18The CFO of a company is concerned about the company's accounts receivable turnover ratio. The company currently offers customers terms of 3/10, net 30. Which of the following strategies would most likely improve the company's accounts receivable turnover ratio?
- AChanging customer terms to 3/20, net 30.
- B.Changing customer terms to 1/10, net 30.
- CEntering into a factoring agreement with a finance company.
- DPledging the accounts receivable to a finance company
19Which of the following transactions would increase the current ratio and decrease net profit?
- AA long-term bond is retired before maturity at a discount.
- BVacant land is sold for less than the net book value.
- CA federal income tax payment due from the previous year is paid.
- DA dividend is paid.
20Which of the following ratios would most likely be used by management to evaluate short-term liquidity?
- AReturn on total assets
- BAccounts receivable turnover.
- CAcid test (quick) ratio.
- DSales to cash.
21An increase in which of the following should cause management to reduce the average inventory?
- AThe lead time needed to acquire inventory.
- BThe annual demand for the product.
- CThe cost of carrying inventory
- DThe cost of placing an order.
Informationen
- Beschreibung
- jjjjjj B-3 Quiz am B3- Working Capital Management, erstellt von Harpratap Singh am 17/04/2015.
- Autor
- Harpratap Singh
- Sprache
- English
- Aufrufe
- 59
- Schlagwörter
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