Do My Essay!

Do not waste time. Get a complete paper today.

Our leading custom writing service provides custom written papers in 80+ disciplines. Order essays, research papers, term papers, book reviews, assignments, dissertation, thesis or extensive dissertations & our expert ENL writers will easily prepare a paper according to your requirements.

You’ll get your high quality plagiarism-free paper according to your deadline! No Bullshit!!

Special offer! Get 20% discount on your first order. Promo code: SAVE20


Question 1 

Assume a firm’s production process requires an average of 80 days to go from raw materials to finished products and another 40 days before the finished goods are sold. If the accounts receivable cycle is 70 days and the accounts payable cycle is 80 days, what would the operating cycle be?

Gudwriter Essay Writing


110 days


130 days


190 days


270 days

Question 2 

The time between ordering materials and collecting cash from receivables is known as the:


operating cycle


cash conversion cycle


accounts receivable period


term payable cycle

Question 3 

The time between when the firm pays its suppliers and when it collects money from its customers is known as the:


operating cycle


cash conversion cycle


accounts receivable period


clearing cycle

Question 4 

Which of the following is not an advantage of short-term borrowing?




establishing continuous relationships   with a bank or financial institution


frequent renewals


lower cost

Question 5 

In June, Erie Plastics had an ending cash balance of $35,000. In July, the firm had total cash receipts of $40,000 and total cash disbursements of $50,000. The minimum cash balance required by the firm is $25,000. At the end of July, Erie Plastics had


an excess cash balance of $25,000


An excess cash balance of $0


required financing of $10,000


required financing of $25,000

Question 6 

A compensating balance on a bank loan effectively ____________ the cost of the loan.






has no effect on


has an indeterminate effect on

Question 7 

In order to borrow $100,000 for a 10% loan on discount basis, the firm will actually have to borrow:









Question 8 

When old short-term debt is replaced by new short-term debt as the old debt comes due, the process is known as:


compensating balance


rolling the debt


fluctuating financing



Question 9 

Which of the following short-term sources of funds is available only to the financially strongest concerns?


trade credit


commercial bank loans


finance company loans


commercial paper

Question 10 

If a firm actually sells its accounts receivable, the process is known as:


wholesale financing




field crediting



Question 11 

The ratio between the present value of a project’s cash inflows and the present value of its initial investment is called the:









Question 12 

Internal rate of return (IRR) and net present value (NPV) methods:


generally arrive at the same   accept/reject decisions


are less sophisticated than the   payback period


cannot make use of the same cash   flows


can be substituted for by the payback   period

Question 13 

Which of the following is not considered a stage in the capital budgeting process?









Question 14 

The internal rate of return concept is best explained by which of the following?


rate where NPV is equal to zero


point where initial investment has   been returned


marginal cost of capital


average book value

Question 15 

The payback period concept is best explained by which of the following?


marginal cost of capital


point where initial investment has   been returned


rate where NPV is equal to zero


accounting rate of return

Question 16 

The cost of debt:


is typically higher than the cost of   preferred stock


must be adjusted to an after-tax cost


is higher than the cost of retained   earnings


is the lowest component cost because   corporations can deduct 70 percent of the interest expense

Question 17 

As a general rule, the capital structure that maximizes stock price also:


minimizes the weighted average cost   of capital


maximizes the weighted average cost   of capital


minimizes the required rate of return   on equity


maximizes the cost of debt

Question 18 

The after-tax cost of debt for a firm in the 35% tax bracket with a before-tax cost of debt of 6% is:









Question 19 

Ningbo Shipping has issued preferred stock at its $125 per share par value. The stock will pay a $15 annual dividend. The cost of issuing and selling the stock was $4 per share. The cost of Ningbo Shipping preferred stock is:









Question 20 

A firm’s mix of debt and equity defines the firm’s:


capital structure


working capital


net working capital


degree of operating leverage

Gudwriter Essay Writing


Leave a Reply

Avatar placeholder