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getsetgo, MBA
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Experience:  MBA from IIM Calcutta, Engineer, 8+ years of exp. at executive level
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Working capital management is primarily concerned with the

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Working capital management is primarily concerned with the management and financing of (Points : 1)
cash and inventory.
current assets and current liabilities.
current assets.
receivables and payables.

2. A financial executive devotes the most time to (Points : 1)
Long-range planning.
Capital budgeting.
Short-term financing.
Working capital management.

3. The term "permanent current assets" implies (Points : 1)
the same thing as fixed assets.
nonmarketable assets.
some minimum level of current assets that are not self-liquidating.
inventory.

4. Well implemented web-based supply chain management has all of the following benefits except (Points : 1)
reduces inventory on hand.
speeds up the ordering and delivery process.
reduces the number of suppliers bidding for a company's business.
decreases overall costs.

5. Frisch Fish Corp expects net income next year to be $600,000. Inventory and accounts receivable will have to be increased by $300,000 to accommodate this sales level. Frisch will pay dividends of $400,000. How much external financing will Frisch Fish need assuming no organically generated increase in liabilities? (Points : 1)
No external financing is required.
$100,000
$200,000
$300,000

6. If a firm uses level production with seasonal sales (Points : 1)
as sales decline inventory will increase.
as sales decline inventory will decrease.
as sales decline accounts receivables will increase.
a and c are correct.

7. The use of cash budgeting procedures (Points : 1)
helps the firm plan its current asset levels for a given production plan.
makes managing inventory easier under seasonal production.
illustrates fluctuating levels of current assets for a given production plan.
all of these are correct.

8. When actual sales are greater than forecasted sales (Points : 1)
inventory will decline.
production schedules might have to be revised upward.
accounts receivable will rise.
all of these.

9. Ideally, which of the following type of assets should be financed with long-term financing? (Points : 1)
Fixed assets only
Fixed assets and temporary current assets
Fixed assets and permanent current assets
Temporary and permanent current assets

10. The term structure of interest rates (Points : 1)
is an indication of investors' expectations about inflation and future interest rates.
will be downward sloping if short-term interest rates are higher than long-term rates.
will be upward sloping under normal conditions.
all of these.

11. A "normal" term structure of interest rates would depict (Points : 1)
short-term rates higher than long-term rates.
long-term rates higher than short-term rates.
no general relationship between short- and long-term rates.
medium rates (1-5 years) lower than both short-term and long-term rates.

12. An aggressive, risk-oriented firm will likely (Points : 1)
borrow long-term and carry low levels of liquidity.
borrow short-term and carry low levels of liquidity.
borrow long-term and carry high levels of liquidity.
borrow short-term and carry high levels of liquidity.

13. In managing cash and marketable securities, what should be the manager's primary concern? (Points : 1)
Maximization of profit
Maximization of liquid assets
Acceptable return on investment
Liquidity and safety

14. One of the first considerations in cash management is (Points : 1)
to have as much cash as possible on hand.
synchronization of cash inflows and cash outflows.
profitability.
to put any excess cash into accounts receivable.

15. The system whereby funds are moved between computer terminals without use of checks is (Points : 1)
electronic funds transfer.
float.
a lock-box system.
magnetic character recognition.

16. International cash management is more complex than domestic based cash management because of (Points : 1)
difficult liquidity management.
different banking systems.
currency risk fluctuations.
all of these.

17. Which of the following securities represents an unsecured promissory note issued by a corporation? (Points : 1)
Certificates of deposit
Savings accounts
Commercial paper
Money market fund

18. The three primary policy variables to consider when extending credit include all of the following except (Points : 1)
credit standards.
the level of inflation.
the terms of trade.
collection policy.

19. The most subjective and also significant segment of the 5 C's of credit for giving final approval is (Points : 1)
capacity.
collateral.
character.
conditions.

20. Which of the following is not a valid quantitative measure for accounts receivable collec
Submitted: 6 years ago.
Category: Homework
Expert:  getsetgo replied 6 years ago.
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