1-Two factors that go into the determination of the appropriate order point are the deliver-time stock and the safety stock required.

	True
	False

2-The most important reasons firms hold cash balances are the transaction and precautionary motives.

	True
	False

3-Transaction balances are used to meet the regular cash needs of the firm, not irregular outflows that will be handled with speculative balances.

	True
	False

4-A company concerned about the liquidity of its near-cash securities should invest in U.S. Treasury bills because the secondary market for U.S. Treasury bills is excellent.

	True
	False

5-Effective cash management involves the trade -off between the risk of insolvency (resulting in higher near cash balances) and the desire to earn higher returns (resulting in lower near cash balances).

	True
	False

6-Efficient collection of accounts receivable helps to determine both the profitability and the liquidity of the firm.

	True
	False

7-The just-in-time inventory control system is just a new approach to the EOQ model which tries to produce the lowest average inventory possible.

	True
	False

8-Carrying inventory reduces the costs associated with periodic bad debt losses.

	True
	False