A firm currently has a 43 day cash cycle. Assume that the firm changes its operations such that it increases its receivables period by 2 days, decreases its inventory period by 1 day and increases its payables period by 3 days. What will the length of the cash cycle be after these changes? A. 38 days B. 41 days C. 43 days D. 45 days

As of the beginning of the quarter, Trellis Florists has a cash balance of $420. During the quarter, suppliers are paid $840, receivables of $1,010 are collected, taxes of $260 are paid, and $55 is borrowed. What is Trellis' cash balance at the end of the quarter? A. $295 B. $310 C. $385 D. $415

The BDF Co. receives five cheques per month, each month. The payments and clearing times are: $4,000, two days; $6,000, two days; $3,000, five days; $8,000, three days, and $7,000, four days. Assume a 360-day year. What are the average daily receipts? A. $76.71 B. $686.67 C. $933.33 D. $1,019.19

Average daily collection float = total dollar-day float / days in month

Which of the following is the best definition of adjustment costs? B. An automated teller machine card used at the point of purchase to avoid the use of cash. As this is not a credit card, money must be available in the user's bank account. C. A chequing account in which a zero balance is maintained by transfers of funds from a master account in an amount only large enough to cover cheques presented. D. The need to hold cash to satisfy normal disbursement and collection activities associated with a firm's ongoing operations E. The costs associated with holding too little cash.

Which one of the following statements is correct concerning zero-balance accounts? A. Zero-balance accounts are no longer legal in Canada. B. A master account must be used in conjunction with a zero-balance account. C. Zero-balance accounts are used solely in conjunction with a lockbox system. D. Zero-balance accounts are still required to maintain a minimal balance.