12.A firm needs to raise cash and at the same time reduce the level of its accounts receivable. This firm would likely benefit most by _______________________.

A.obtaining an unsecured short-term loan.

B.applying for a committed line of credit.

C.assigning its receivables on a short-term loan.

D.factoring its receivables.

E.securing any short-term credit with a blanket inventory lien.

13.Mycale's has always paid its suppliers in 30 days. The company just hired a new financial officer who is changing the policy such that suppliers will now be paid in 45 days. This change will ______ the accounts payable period and _______ the cash cycle.

A.Increase; not affect

B.Increase; increase

C.Increase; decrease

D.Decrease; increase

E.Decrease; decrease

19.One legitimate advantage to leasing is that:

A.Leasing provides 100% financing.

B.Leasing provides a source of off-balance sheet financing.

C.By leasing, the lessee's income statement will be stronger.

D.Taxes may be reduced by leasing.

E.Unlike borrowing and purchase, leasing decreases a firm's financial leverage.

20.Which of the following describe(s) a financial lease?

I. The lease is cancellable at the option of the lessee.

II. The term of the lease is usually long-term.

III. The lessee is typically required to maintain the asset.

A.I only

B.I and II only

C.I and III only

D.II and III only

E.I, II, and III

21.The _______ of a forward contract is obligated to ______ delivery and pay for the contracted goods at the forward price; the _______ of a forward contract is obligated to ______ delivery and accept payment for the goods at the forward price.

A.seller; make; buyer; take

B.seller; take; buyer; make

C.buyer; make; seller; take

D.buyer; take; seller; take

E.buyer; take; seller; make

22.You are a cattle rancher. Which of the following actions would allow you to lock in the acquisition cost of your cattle feed?

I. Sell a futures contract on cattle.

II. Buy a futures contract on cattle.

III. Buy a futures put option on cattle.

IV. Sell a futures put option on cattle.

A.III only

B.II or IV only

C.I or IV only

D.II or III only

E.I or III only