Question 1

Match the term with its definition.Some terms may not be used
a.Cash conversion cycle
b.Cost of capital
c.Days in inventory
d.Days in payables
e.Days sales outstanding
f.Lock box
g.Pledged accounts receivable
h.Working capital management
-The management of current assets and current liabilities.

Accepted Answer

h

Question 2

Match the term with its definition.Some terms may not be used
a.Accounting return on investment technique
b.Capital budgeting analysis
c.Discounted cash flow techniques
d.Internal rate of return
e.Net present value
f.Payback period technique
g.Working capital cycle
h.Working capital management
-A capital budgeting technique that compares expected average annual after-tax profits to the average book value of an investment.

Accepted Answer

a

Question 3

Average annual after-tax profits per year divided by the average book value of the investment equals:

Accepted Answer

A)  payback period technique.
B)  average investment outlay.
C)  average investment capability.
D)  accounting return on investment. D

Question 4

Under the NPV method, the rate of return required to satisfy the business's investors is the:

Accepted Answer

A)  opportunity cost.
B)  internal rate of return.
C)  cost of capital.
D)  accounting return on investment.

Question 5

Net cash flow and revenue are:

Accepted Answer

A)  opposites.
B)  different.
C)  identical.
D)  identical after adjustment for depreciation.

Question 6

Many small business owners do not use discounted cash flow techniques.What are the reasons they do not?

Accepted Answer

The answer of Many small business owners do not use...

Question 7

Jane has started a gift basket company that specialises in regional products.Several companies use her baskets for the holidays, to welcome new employees and for their sales staff to use as gifts for corporate clients.Because she noticed her average collection period from last quarter to this quarter had doubled to 60 days, she then realised the company's average age in inventory has increased from 30 to 40 days and the average payment period dropped from 35 to 30 days.After calculating each quarter's cash conversion cycles, what do the changes indicate?

Accepted Answer

The answer of Jane has started a gift basket company...

Question 8

Discuss cash flow characteristics of businesses that have a cash culture in relation to the recession.

Accepted Answer

The answer of Discuss cash flow characteristics of businesses that...

Question 9

Match the term with its definition.Some terms may not be used
a.Accounting return on investment technique
b.Capital budgeting analysis
c.Discounted cash flow techniques
d.Internal rate of return
e.Net present value
f.Payback period technique
g.Working capital cycle
h.Working capital management
-Capital budgeting techniques that compare the present value of future cash flow with the cost of the initial investment.

Accepted Answer

The answer of Match the term with its definition.Some terms...

Question 10

What are key issues in managing accounts payable?

Accepted Answer

The answer of What are key issues in managing accounts...

Question 11

Discuss the importance of working capital management and how it relates to the working-capital cycle of a small business.

Accepted Answer

The answer of Discuss the importance of working capital management...

Question 12

Which statement is true concerning inventory management programmes?

Accepted Answer

A)  A yearly inventory for accounting purposes should be sufficient for most small businesses.
B)  Keeping stock for "just in case" is suggested for customer satisfaction and is needed for inventory.
C)  Software programs supplemented by a required physical inventory will assist in inventory control.
D)  Slow moving items in a company's inventory are limited concerns since they can be marked down and sold.

Question 13

During the cash conversion cycle, the business has the benefit of the financing provided by the supplier.

Accepted Answer

A) True 
 B)False

Question 14

Match the term with its definition.Some terms may not be used
a.Cash conversion cycle
b.Cost of capital
c.Days in inventory
d.Days in payables
e.Days sales outstanding
f.Lock box
g.Pledged accounts receivable
h.Working capital management
-The time required to convert paid-for inventory and accounts receivable into cash.

Accepted Answer

The answer of Match the term with its definition.Some terms...

Question 15

IRR:

Accepted Answer

A)  takes into account that cash received today is more valuable than cash received later.
B)  estimates the rate of return that can be expected from an investment.
C)  estimates the current value of future cash flows.
D)  compares the present value of future cash flows with cash outlay.

Question 16

Every component of working capital has two dimensions: interest and money.

Accepted Answer

A) True 
 B)False

Question 17

Accounts receivable financing:

Accepted Answer

A)  allows small businesses to extend credit to customers.
B)  delays the time a company receives money from receivables.
C)  means borrowing money against the business's accounts receivable.
D)  is not a suggested practice due to the cost.

Question 18

Accounting profits are identical to actual cash flows.

Accepted Answer

A) True 
 B)False

Question 19

"How long will it take to recover the original investment outlay?" is answered using:

Accepted Answer

A)  accounting ratio analysis.
B)  discounted cash flow.
C)  net present value.
D)  payback period technique.

Question 20

Match the term with its definition.Some terms may not be used
a.Accounting return on investment technique
b.Capital budgeting analysis
c.Discounted cash flow techniques
d.Internal rate of return
e.Net present value
f.Payback period technique
g.Working capital cycle
h.Working capital management
-The present value of expected future cash flows less the initial investment outlay.

Accepted Answer

The answer of Match the term with its definition.Some terms...

Exam 22: Managing the Firms Assets

Match the term with its definition.Some terms may not be used a.Cash conversion cycle b.Cost of capital c.Days in inventory d.Days in payables e.Days sales outstanding f.Lock box g.Pledged accounts receivable h.Working capital management -The management of current assets and current liabilities.

Average annual after-tax profits per year divided by the average book value of the investment equals:

Under the NPV method, the rate of return required to satisfy the business's investors is the:

Net cash flow and revenue are:

Many small business owners do not use discounted cash flow techniques.What are the reasons they do not?

Discuss cash flow characteristics of businesses that have a cash culture in relation to the recession.

What are key issues in managing accounts payable?

Discuss the importance of working capital management and how it relates to the working-capital cycle of a small business.

Which statement is true concerning inventory management programmes?

During the cash conversion cycle, the business has the benefit of the financing provided by the supplier.

IRR:

Every component of working capital has two dimensions: interest and money.

Accounts receivable financing:

Accounting profits are identical to actual cash flows.

"How long will it take to recover the original investment outlay?" is answered using: