4. Which of the following statements are correct concerning a flexible short-term financial policy? 1. A flexible policy is most appropri to shortage costs. ate when carrying costs are low relative II. A flexible policy entails the use of maintenance of large cash balances III. A flexible policy is associated with low costs of not having enough IV. The optimal current asset holdings are higher under a flexible policy than a. I and Il only b. 1 and I1l only c Il and IlI only inventory on hand. under a restrictive policy Ill and IV only that Randy collects each quarter is equal to: d. e. . I, and IV only 5. Randy's Meat Market has a 46-day collection period. The amount of cash 46% of last quarter sales plus 54% of this quarter sales. b. 46 days of sales from last quarter plus 54 days of sales from this quarter. c. 44 days of sales from last quarter plus 46 days of sales from this quarter d, 51% of last quarter sales plus 49% of this quarter sales. 54% of last quarter sales plus 46% of this quarter sales. 6. Which of the following priods is the operating cycle equal to? A) B) C) D) E) Cash cycle - accounts payable period Inventory period- accounts receivable period Cash cycle + accounts payable period Inventory period - accounts receivable period - accounts payable period Accounts receivable period - inventory period 7. The practice of and procedures for moving cash from multiple banks into a firm's centralized bank account(s) is known as A) cash concentration B) strategic cash disbursement C) transfer flotation D) payables management E) float management A) In order to maximize their purchases of marketable securities. B) Because there is a trade-off between the benefit and cost of liquidity C) Since most firms follow flexible policies of working capital management D) Because of the float the firm gains when it writes checks E) Because of the fluctuation in interest rates on marketable securities 8. It is important for any firm to determine its appropriate target cash balance