FINC400 quiz 3

Question # 00000557 Posted By: spqr Updated on: 08/22/2013 07:49 PM Due on: 08/31/2013
Subject Finance Topic Finance Tutorials:
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FINC400 week 3 quiz

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Question 1 of 25

4.0 Points

As a general rule, it is desirable to finance the permanent assets, including "permanent current assets", with long-term debt and equity.


True

False

Question 2 of 25

4.0 Points

Short-term interest rates are generally lower than long-term interest rates.


A. True

B. False

Question 3 of 25

4.0 Points

Commercial bank term loans


A.usually carry fixed interest rates.


B.are very short-term in nature.


C.are offered to superior credit applicants.


D.both b and c.


Question 4 of 25

4.0 Points





Dun & Bradstreet is known for providing


A.interest rate information to cash managers.


B.credit scoring reports that rank a company's payment habits relative to its peer group.


C.cash management systems to corporate treasurers.


D.consumer credit reports to credit card companies


Question 5 of 25

4.0 Points

Small companies finance a relatively greater proportion of their assets through trade credit than do larger concerns.


A. True

B. False

Question 6 of 25

4.0 Points




A financial executive devotes the most time to


A.Long-range planning.


B.Capital budgeting.


C.Short-term financing.


D.Working capital management.


Question 7 of 25

4.0 Points





Short-term financing is risky because of the possibility of rising short-term rates and the inability of always being able to refund short-term debt.


A. True

B. False

Question 8 of 25

4.0 Points




From the banker's point of view, short-term bank credit is an excellent way of financing


A.fixed assets.


B.permanent working capital needs.


C.repayment of long-term debt.


D.seasonal bulges in inventory and receivables.


Question 9 of 25

4.0 Points

One of the first considerations in cash management is


A.to have as much cash as possible on hand.


B.synchronization of cash inflows and cash outflows.


C.profitability.


D.to put any excess cash into accounts receivable.


uestion 10 of 25

4.0 Points

Cash balances are usually determined by the amount of cash flowing through the firm on a yearly basis.


True

False

Seasonal production allows for maximum efficiency in machinery and manpower use.


A. True

B. False

Question 12 of 25

4.0 Points

Even during slack loan periods, banks will never loan out money at an interest rate lower than the prime rate because the prime rate is their best rate.


A. True

B. False

Question 13 of 25

4.0 Points

The use of cash budgeting procedures


A.helps the firm plan its current asset levels for a given production plan.


B.makes managing inventory easier under seasonal production.


C.

illustrates fluctuating levels of current assets for a given production plan.


D.all of these are correct.

Question 14 of 25

4.0 Points

Permanent current assets are not similar to fixed assets because they are fully liquidated within the year.


A. True

B. False


Question 15 of 25

4.0 Points




Modos Company has deposited $3,500 in checks received from customers. It has written $1,400 in checks to its suppliers. The initial bank and book balance was $600. If $1,600 of its customer’s checks have cleared but only $600 of its own, calculate its float.


A.$1,200


B.$1,100


C.$300


D.$700


Question 16 of 25

4.0 Points

A Just-In-Time (JIT) inventory management program has all but which of the following requirements?


A.quality production


B.large safety stocks


C.close ties between suppliers, manufacturers, and customers


D.minimizing inventory levels


Question 17 of 25

4.0 Points

Because of changing economic conditions, it is difficult for companies such as Dun & Bradstreet to devise models predicting payment problems and probability of bankruptcy 12 months in the future.


A. True

B. False

Question 18 of 25

4.0 Points

A trade discount is a percentage reduction from the invoice price given for purchasing certain minimum quantities.


Question 19 of 25

4.0 Points

The Truth in Lending law is designed to protect






Question 20 of 25

4.0 Points

A "normal" term structure of interest rates would depict






Question 21 of 25

4.0 Points





Bank loans to business firms






Question 22 of 25

4.0 Points

Normally, permanent current assets should be financed by






Question 23 of 25

4.0 Points

Which of the following is not a valid quantitative measure for accounts receivable collection policies?






uestion 24 of 25

4.0 Points

Working capital management is relatively unimportant for the small business.


Question 25 of 25

4.0 Points

For most firms, the primary motive for holding cash is the transaction motive.


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Tutorials for this Question
  1. Tutorial # 00000436 Posted By: mac123 Posted on: 08/22/2013 07:51 PM
    Puchased By: 2
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    The solution of FINC400 quiz 3...
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