Question 1

A company sells $ 60,000 of goods in January, 80% in cash and 20% paid in full after 30 days. How much cash will be collected in March for the sales made in January?

Select one:

$ 48,000

b.

SO

$ 60,000

$12,000

Question 2

A company's inventory conversion period is 43.5 days, receivables conversion period is 47.2 days, trade payables deferral period is 35.4 days. What is the company's operating cycle?

Select one:

39.1 days

55.3 days

126.1 days

31.7 days

None of the above

Question 3

All the following are major categories of budget, except?

Select one:

Comprehensive budgets

Complementary budgets

Flexible budgets

Capital budgets

Question 4

Cash conversion cycle is always greater than operating cycle.

Select one:

False

b.

True

Question 5

Question text

Costs that are necessary for the production cycle but that cannot be clearly allocated to specific

products or services are called

Select one:

indirect costs

committea costs

c.

avoidable costs

Grecccosts

Question 6

Question text

Developing strategic goals and plans is the responsibility of

Select one:

a.

middle-level managers

top-level managers

bottom level managers

all of the above

Question 7

How can additional cash be obtained?

Select one:

by prepaying expenses

by stretching trade payables

by paying trade payables faster

by paying suppliers on a cash basis

Question 8

Question text

How much would a company lose when it receives $25,000 cheque 7 days late if the management expects to earn a 10% return on investment?

select one:

None of the above

$175

C.

$38

548

$357

Question 9

Question teyt

If a business sells $7,500 units or product per year, the ordering costs are $75 per order, and the carrying cost are $0.75 per unit per year, what would be the number of units the business should order each time they order using the economic order quantity model?

Select one:

None of the above

1,225 units

C.

1,091 units

791 units

1,156 units

Question 10

Question text

If a company wishes to be efficient in managing their working capital, then using the days in working capital measure, which of the following the company should do?

elect one:

increase the level of inventory

pay their suppliers quickly

pay their suppliers slowly

increase their trade receivable

None of the above

Question 11

Question text

In order to improve the cash conversion cycle, a business should do which of the following?

Select one:

increase the inventory conversion period

increase the trade payables deferral period

increase the trade receivable conversion period

increase share capital

Question 12

Question text

In the SWOT analysis, the W stands for working capital:

Select one:

False

True

Question 13

Question text

Kintuki Company's operating cycle is 210 days. If the average payment period is 60 days, the cash conversion cycle is:

Select one:

90 days

270 days

C.

150 days

not enough information available to calculate the answer

Question 14

Question text

Marketable securities is a working capital account:

Select one:

True

False

Question 15

Question text

One of the ways, a business can improve the collection of cash is by renting a post office box in an area where the business has many customers:

Select one:

True

False

Question 16

Question teyt

Philips Company's 2019 Sales were $230,000; Account Receivables were $17,200; Cost of Sales were $127,300, Inventories were $11,300; Account Payables were $14,200. What was the company's operating cycle?

Select one:

90 days

120 days

60 days

30 days

Question 17

Question text

Philips Company's current average collection period (ACP) is 37 days. Last period's sales (revenue) amount was $431,700 and ending acct. receivables were $43,800. If the company's management can reduce the average collection period to 30 days, how much cash can the company free up to use ir other areas (assuming the sales amount remain the same)?

Select one:

$9.333

b.

$35,940

$10,120

$8,310

None of the above

Question 18

Question text

The goal of working capital management is to:

Select one:

maintain the current sneed of the cash rlow cucle arter sales have been made

slow down the cash flow cycle after sales have been made

speed up the cash flow cycle after the sales have been made

None of the above

Question 19

Question text

The success of the trade receivables department is measured by which of the following?

Select one:

inventory conversion period

currencrrio

account payable deferral period

average collection period

Question 20

Question text

What does float refer to?

select one:

trade and other payables

time lag

Turnover

short-term deposits

Question 21

Question text

What does the days of working capital measurement calculate?

the number of days of working capital a business holds to meet the average daily requirements of purchases

the number of days of working capital a business holds to meet the average daily requirements of sales

the number of days of working capital a business holds to meet the average daily requirements of

inventory

the number of days of working capital a business holds to meet the average daily requirements of trade receivables

Question 22

Question text

What is the EOQ given that annual sales are 1,300 units; Carrying costs are $6.32/unit per year and fixed costs are S8.75 per order?

Select one:

60 units

52 units

70 units

45 units

Question 23

What is the first item in a typical business plan?

Select one:

the profile of the management team

an executive summary

a description of the industry

a description of the business

Question 24

A firm is considering investment in a new project. The initial cash outlay is $30,000. The cash inflows in year one, two and three would be $15,000 each year. The rate of return demanded by the firm is 10% What is the project's NPV?

Select one:

$7,303

15,000

None of the above

$11,333

Question 25

Question text

Cash conversion cycle is always greater than operating cycle.

Select one:

True

False

Question 26

Company A has a debt ratio of 45% and Company B has a debt ratio of 50%. The industry benchmark is 48%. Company B's debt ratio is better than the industry benchmark.

Select one:

False

True

Question 27

Company A has a times-interest-earned ratio of 5.9, and company B has a times-interest-earned ratio of

6.4. A is a competitor of B. What conclusions would the chief financial officer of A arrive at looking at these numbers and his competitor's?

Select one:

The times-interest-earned ratio is of no interest to lenders because the ratios are so close togethe

combanv A is in a better position to bav interest than it was last vear

Company B is in a better position to pay interest than company A

A times-interest-earned ratio of 5.9 is better than a times-interest-earned ratio of 6.4

Question 28

Developing strategic goals and plans is the responsibility of

Select one:

middle-level managers

all of the above

top-level managers

bottom level managers

Question 29

How is the contribution margin calculated?

Select one:

by subtracting fixed costs from revenue

by subtracting variable costs from revenue

by subtracting cost of sales from revenue

by subtracting operating income from revenue

Question 30

How is the PV ratio calculated?

Select one:

divide contribution margin by profit after tax

divide revenue by contribution margin

divide revenue by profit after tax

divide contribution margin by revenue