Question 1

1pts

Compute the cash cycle based on the following information:

Average Collection Period = 53

Accounts Payable Period = 31

Average Age of Inventory = 70

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Question 2

1pts

MonthSales $MonthSales $Jan45121July45587Feb34489Aug16500Mar16500Sep45121Apr45587Oct16500May45121Nov34489June34489Dec45587

Sales are collected as follows:

In the month of Sales: 39%

In the next month: 32%

After 2 months: 6%

Remainder is considered as bad debt and is not collected.

Calculate the cash collection for June.

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

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Question 3

1pts

ABC Corporation currently has an inventory turnover of 24.11, a payables turnover of 12.9, and a receivables turnover of 15.4. How many days are in the cash cycle?

Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

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Question 4

1pts

ABC Corporation currently has an inventory turnover of 21.02, a payables turnover of 11.41, and a receivables turnover of 6.63. How many days are in the operating cycle?

Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

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Question 5

1pts

Identify a source of cash from below. Choose only one.

Decrease in accounts receivable

decrease in current liabilities

Increase in fixed assets

decrease in long-term debt

increase in inventory

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Question 6

1pts

Which of the following is a Source of Cash? Choose only one.

Increase in current assets

Increase in long-term debt

Increase in fixed assets

decrease in current liabilities

decrease in equity

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Question 7

1pts

ABC Company has annual sales of $355743 and cost of goods sold of $198,600. The average accounts receivable balance is $85876. How many days on average does it take the firm to collect its accounts receivable? Assume 365 days.

Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

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Question 8

1pts

MonthSales $MonthSales $Jan34014July41767Feb44613Aug30919Mar30919Sep34014Apr41767Oct30919May34014Nov44613June44613Dec41767

Sales are collected as follows:

In the month of Sales: 42%

In the next month: 28%

After 2 months: 6%

After 3 months: remainder is collected

Calculate the cash collection for December.

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

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Question 9

1pts

MonthSales $MonthSales $Jan12192July41397Feb26872Aug39010Mar39010Sep12192Apr41397Oct39010May12192Nov26872June26872Dec41397

The company has estimated expenses as follows:

General and administrative expenses: $5715

Material purchases are 41 percent of sales. Material purchases are paid in the month following the purchase.

Interest payment per month: $4554

Rent expenses per quarter starting March: $7905

Calculate the cash outflows for June.

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

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Question 10

1pts

Identify which of the following will increase the operating cycle. Choose only one.

decrease in average collection period

decrease in days' sales in inventory

decrease in accounts payable period

Decrease in inventory turnover ratio

decrease in accounts payable turnover ratio

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Question 11

1pts

Compute the Accounts Payable (A/P) period based on the following information:

Average A/P balance = $62998

Annual Cost of Goods Sold = $372962

Assume 365 days

Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

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Question 12

1pts

MonthSales $MonthSales $Jan46126July19302Feb44598Aug38231Mar38231Sep46126Apr19302Oct38231May46126Nov44598June44598Dec19302

Sales are collected as follows:

In the month of Sales: 40%

In the next month: 27%

After 2 months: 5%

After 3 months: remainder is collected

Calculate the cash collection for November.

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

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Question 13

1pts

Which one of the following is most indicative of a flexible short-term financial policy?

Relatively low level of inventory

Relatively low level of accounts receivable

Relatively high ratio of short-term debt to total debt

Relatively low level of liquidity

Relatively high ratio of current assets to total assets

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Question 14

1pts

ABC Company has annual sales of $400,000 and cost of goods sold of $344016. The accounts payable period is 37.32 days. What is the average accounts payable balance?

Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

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Question 15

1pts

MonthSales $MonthSales $Jan12442July35005Feb34126Aug36667Mar36667Sep12442Apr35005Oct36667May12442Nov34126June34126Dec35005

Sales are collected as follows:

In the month of Sales: 33%

In the next month: 34%

After 2 months: 11%

After 3 months: remainder is collected

Calculate the cash collection for November.

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

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Question 16

1pts

The terms of the sale were 2/10, net 58. What is the effective annual rate of interest?

Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.

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Question 17

1pts

ABC Company has an average collection period of 29 days and factors all of its receivables immediately at a 1.5 percent discount. Assume all accounts are collected in full. What is the firm's effective cost of borrowing?

Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.

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Question 18

1pts

OnJuly 15th, you purchased $10,000 worth of goods. The terms of the sale were 1/9, net 51. What is the effective annual rate of interest for the credit period for this sale?

Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.

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Question 19

1pts

ABC Company has a cash cycle of 11.21 days, an operating cycle of 22.94 days, and an average collection period of 7 days. The company reported cost of goods sold of $241676. What is the company's average balance in Accounts Payable?

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box

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Question 20

1pts

ABC Company writes 119 checks a day for an average amount of $415 each. These checks generally clear the bank in 5 days. In addition, the firm generally receives an average of $129653 a day in checks that are deposited immediately. Deposited funds are available in 1 days. What is the firm's net float?

Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

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Question 21

1pts

As of this morning, your firm had a ledger balance of $4402 with no outstanding deposits or checks. Today, your firm deposited 4 checks in the amount of $161 each and wrote a check in the amount of $660. What is the amount of the collection float as of the end of the day?

Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

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Question 22

1pts

As of this morning, your firm had a ledger balance of $4193 with no outstanding deposits or checks. Today, your firm deposited 2 checks in the amount of $350 each and wrote 13 checks in the amount of $862 each. What is the amount of the disbursement float as of the end of the day?

Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

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Question 23

1pts

Indicate the effect of the following on the cash cycle: Accounts payable period goes up

Decrease

Increase

No change

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Question 24

1pts

Indicate the effect of the following on the cash cycle: Customers take longer to make the payment

No change

Increase

Decrease

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Question 25

1pts

Indicate the effect of the following on the operating cycle: Accounts payable goes up

Increase

Decrease

No change