Exam 18: Short-Term Finance Amcq Planning

Baker Industries has a 30-day accounts receivable period.The estimated quarterly sales for this year,starting with the first quarter,are $1,450,$1,620,$1,740,and $2,250,respectively.How much does the firm expect to collect in the fourth quarter? Assume a 360-day year.

Which one of the following will increase the net working capital of a firm? Assume the current ratio is positive.

A supplier offers you credit terms of 2/10,net 45.What is the cost of forgoing the discount on a purchase of $318,600? Assume a 365-day year.

A fraction of the available credit on a loan agreement deposited by the borrower with the bank in a low or non-interest-bearing account is called a

A monthly cumulative cash deficit indicates that a firm

The cash cycle includes the time period between the time when

A prearranged credit agreement with a bank typically open for two or more years is called a

The Babco Co.has a $225,000 line of credit with an interest rate of 6.5 percent and a compensating balance requirement of 4 percent that is based on the total amount borrowed.What is the effective interest rate if the firm needs $163,000 to finance some expenses? The company plans on repaying the loan in a lump sum at the end of 1 year.

Blackwell Co.has credit sales of $317,428,costs of goods sold of $151,217,and average accounts receivable of $28,744.How long on average does it take the firm's credit customers to pay for their purchases?

Midwest Meats has a net cash inflow,excluding long-term financing expenses,for the quarter of $248.The minimum and beginning cash balance is $300,and the firm has $2,300 in short-term debt.The quarterly interest on the loan is $37.How much does the firm need to borrow or how much can it repay on its loans to have a zero cumulative surplus for the quarter?

A restrictive short-term financial policy,as compared to a more flexible policy,tends to increase

Snow Mountain Resort had a beginning cash balance of $9,720 for the quarter.During the quarter,the firm had cash collections of $157,311,wages and other cash expenses of $67,900,payments on account of $57,412,and dividends paid of $2,500.The minimum cash balance was just set at $1,200.The beginning short-term debt is $28,000 with a quarterly interest rate of 1.4 percent.At quarter end,the cumulative surplus (deficit)is ________ and the ending short-term debt is ________.

On April 1^st,a firm had a beginning cash balance of $239.March sales were $474 and April sales were $463.During April,the firm had cash expenses of $135 and payments on accounts payable of $212.The accounts receivable period is 30 days.What is the firm's beginning cash balance on May 1^st? Assume a 360-day year.

A firm currently has a 29.3-day cash cycle.Assume the firm changes its operations such that it decreases its receivables period by 2.7 days,increases its inventory period by 1.4 days,and decreases its payables period by 2.4 days.What will the length of the cash cycle be after these changes?

Which one of the following is a source of cash?

Upstate Farms factors its accounts receivable immediately at a discount of 2.5 percent.The average collection period is 39 days.Assume all accounts are collected in full.What is the effective annual interest rate on this arrangement? Assume a 365-day year.

A supplier offers credit terms of 2/15,net 45.This means that

Which one of the following will decrease the operating cycle?

Toni's has a net cash inflow,excluding long-term financing expenses,for the quarter of $418.02.The beginning cash balance is $187.40.The firm has $546 in short-term debt with a quarterly interest rate of 1.2 percent.New company policy is to maintain a minimum cash balance of $140.How much does the firm need to borrow or how much can it repay on its loan to have a zero cumulative surplus for the quarter?

Weisbro and Sons purchases its inventory one quarter prior to the quarter of sale.The purchase price is 57 percent of the sales price.The accounts payable period is 60 days.The accounts payable balance at the beginning of Quarter 1 is $27,500.Sales for Quarters 1 through 4 are expected to be $46,400,$51,900,$57,800,and $62,500,respectively.What is the amount of the expected disbursements for Quarter 3? Assume a 360-day year.