Question 1

A firm following a conservative approach to working capital policy will finance of the fixed assets,
Of the
Permanent current assets, and

Accepted Answer

A) all; some; none 
B) none; all; all 
C) all; none; none 
D) all; all; some 
E) some; all; all of temporary current assets are financed with long term capital. 
A) all; some; none 
B) none; all; all 
C) all; none; none 
D) all; all; some 
E) some; all; all of temporary current assets are financed with long term capital.

Question 2

Sea Sport Boat Corporation currently has a current ratio of two.If Sea Sport Boat Corporation increases current assets and current liabilities by the same amount, what will happen to their current ratio?

Accepted Answer

A) Increase 
B) Decrease 
C) Stay the same 
D) Change, but more information is required to determine the direction of the change. 
E) None of the above. 
A) Increase 
B) Decrease 
C) Stay the same 
D) Change, but more information is required to determine the direction of the change. 
E) None of the above.

Question 3

The cash conversion cycle is the length of time from the raw materials to manufacture a product until the of accounts receivable associated with the sale of the product.

Accepted Answer

A) ordering of; creation 
B) ordering of; collection 
C) payment for; creation 
D) payment for; collection 
E) none of the above 
A) ordering of; creation 
B) ordering of; collection 
C) payment for; creation 
D) payment for; collection 
E) none of the above

Question 4

The aggressive approach towards working capital policy requires the   use of short-term debt, whereas the
Conservative approach of working capital policy requires the

Accepted Answer

A) greatest; least 
B) least; greatest 
C) limited; total 
D) lack of; heavy 
E) heavy; heavy use of short-term debt. 
A) greatest; least 
B) least; greatest 
C) limited; total 
D) lack of; heavy 
E) heavy; heavy use of short-term debt.

Question 5

A firm with a current ratio equal to four will have its current ratio increase if both current assets and current liabilities increase by the same amount.

Accepted Answer

A) True 
 B)False

Question 6

Working capital management is not important for new firms since they will be able to generate positive cash flows at some time in the future.

Accepted Answer

A) True 
 B)False

Question 7

Due to advanced technology and the similarity of general procedures, working capital management for multinational firms is no more complex than it is for domestic firms.

Accepted Answer

A) True 
 B)False

Question 8

A high current ratio insures that a firm will have the cash required to meet its needs.

Accepted Answer

A) True 
 B)False

A firm following a conservative approach to working capital policy will finance of the fixed assets, Of the Permanent current assets, and

Sea Sport Boat Corporation currently has a current ratio of two.If Sea Sport Boat Corporation increases current assets and current liabilities by the same amount, what will happen to their current ratio?

The cash conversion cycle is the length of time from the raw materials to manufacture a product until the of accounts receivable associated with the sale of the product.

The aggressive approach towards working capital policy requires the use of short-term debt, whereas the Conservative approach of working capital policy requires the

A firm with a current ratio equal to four will have its current ratio increase if both current assets and current liabilities increase by the same amount.

Working capital management is not important for new firms since they will be able to generate positive cash flows at some time in the future.

Due to advanced technology and the similarity of general procedures, working capital management for multinational firms is no more complex than it is for domestic firms.

A high current ratio insures that a firm will have the cash required to meet its needs.

An Overview of Managerial Finance

Analysis of Financial Statements

The Financial Environment: Markets, Institutions, and Investment Banking

Time Value of Money

The Cost of Money Interest Rates

Bonds Debt Characteristics and Valuation

Socks Equity Characteristics and Valuation

Risk and Rates of Return

Capital Budgeting Techniques

Project Cash Flows and Risk Appendix

The Cost of Capital

Capital Structure

Distribution of Retained Earrings: Dividends and Stock Repurchases

Working Capital Policy

Managing Short-Term Liabilities Financing

Financial Planning and Control

Filters

Exam 15: Managing Short- Term Assets

A firm following a conservative approach to working capital policy will finance of the fixed assets, Of the Permanent current assets, and

Sea Sport Boat Corporation currently has a current ratio of two.If Sea Sport Boat Corporation increases current assets and current liabilities by the same amount, what will happen to their current ratio?

The cash conversion cycle is the length of time from the raw materials to manufacture a product until the of accounts receivable associated with the sale of the product.

The aggressive approach towards working capital policy requires the use of short-term debt, whereas the Conservative approach of working capital policy requires the

A firm with a current ratio equal to four will have its current ratio increase if both current assets and current liabilities increase by the same amount.

Working capital management is not important for new firms since they will be able to generate positive cash flows at some time in the future.

Due to advanced technology and the similarity of general procedures, working capital management for multinational firms is no more complex than it is for domestic firms.

A high current ratio insures that a firm will have the cash required to meet its needs.

An Overview of Managerial Finance

Analysis of Financial Statements

The Financial Environment: Markets, Institutions, and Investment Banking

Time Value of Money

The Cost of Money Interest Rates

Bonds Debt Characteristics and Valuation

Socks Equity Characteristics and Valuation

Risk and Rates of Return

Capital Budgeting Techniques

Project Cash Flows and Risk Appendix

The Cost of Capital

Capital Structure

Distribution of Retained Earrings: Dividends and Stock Repurchases

Working Capital Policy

Managing Short-Term Liabilities Financing

Financial Planning and Control

Filters