1-The overriding goal of inventory management is to ensure that the firm never suffers a stock-out, i.e., never runs out of an inventory item.

True

False

2- Not taking cash discounts is costly, and as a result, firms that do not take them are usually those that are performing poorly and have inadequate cash balances.

True

False

3- Determining a firm's optimal investment in working capital and deciding how that investment should be financed are critical to working capital management.

True

False

4- If a firm busy on terms of 2/10 net 30, it should pay as early as possible during the discount period.

True

False

5- Net operating working capital is defined as operating current assets minus operating current liabilities

True

False

6- Cash is often referred to as a "non-earning" asset. Thus, one goal of cash management is to minimize the amount of cash necessary for conducting a firm's normal business activities.

True

False