QUESTION 1

ABC Company has annual sales of $400,000 and cost of goods sold of $264,969. The accounts payable period is 47.42 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.

1 points

QUESTION 2

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

	increase in inventory
	decrease in long-term debt
	Decrease in accounts receivable
	decrease in current liabilities
	Increase in fixed assets

1 points

QUESTION 3

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

	decrease in accounts payable period
	Decrease in inventory turnover ratio
	decrease in accounts payable turnover ratio
	decrease in average collection period
	decrease in days' sales in inventory

1 points

QUESTION 4

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

	Relatively low level of accounts receivable
	Relatively low level of inventory
	Relatively low level of liquidity
	Relatively high ratio of current assets to total assets
	Relatively high ratio of short-term debt to total debt

1 points

QUESTION 5

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

	Increase in fixed assets
	Increase in current assets
	decrease in equity
	Increase in long-term debt
	decrease in current liabilities

1 points

QUESTION 6

Month	Sales $	Month	Sales $
Jan	12,192	July	41,397
Feb	26,872	Aug	39,010
Mar	39,010	Sep	12,192
Apr	41,397	Oct	39,010
May	12,192	Nov	26,872
June	26,872	Dec	41,397

The company has estimated expenses as follows: General and administrative expenses: $5,715 Material purchases are 41 percent of sales. Material purchases are paid in the month following the purchase. Interest payment per month: $4,554 Rent expenses per quarter starting March: $7,905

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.

1 points

QUESTION 7

The terms of the sale were 4/13, net 63. 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.

1 points

QUESTION 8

As of this morning, your firm had a ledger balance of $4,021 with no outstanding deposits or checks. Today, your firm deposited 8 checks in the amount of $398 each and wrote a check in the amount of $943. 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.

1 points

QUESTION 9

Month	Sales $	Month	Sales $
Jan	30,792	July	17,008
Feb	12,289	Aug	28,942
Mar	28,942	Sep	30,792
Apr	17,008	Oct	28,942
May	30,792	Nov	12,289
June	12,289	Dec	17,008

Sales are collected as follows:

In the month of Sales: 28% In the next month: 32% After 2 months: 5% 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.

1 points

QUESTION 10

OnJuly 15^th, you purchased $10,000 worth of goods. The terms of the sale were 2/7, net 46. 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.

1 points

QUESTION 11

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

Average A/P balance = $53,204 Annual Cost of Goods Sold = $218,177 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.

1 points

QUESTION 12

Compute the cash cycle based on the following information:

Average Collection Period = 78 Accounts Payable Period = 44 Average Age of Inventory = 38

1 points

QUESTION 13

ABC Company writes 252 checks a day for an average amount of $380 each. These checks generally clear the bank in 2 days. In addition, the firm generally receives an average of $146,088 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.

1 points

QUESTION 14

ABC Company has a cash cycle of 12.99 days, an operating cycle of 20.81 days, and an average collection period of 6 days. The company reported cost of goods sold of $243,729. 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

1 points

QUESTION 15

ABC Company has an average collection period of 43 days and factors all of its receivables immediately at a 2.5 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.

1 points

QUESTION 16

ABC Corporation currently has an inventory turnover of 5.64, a payables turnover of 16.14, and a receivables turnover of 10.18. 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.

1 points

QUESTION 17

Month	Sales $	Month	Sales $
Jan	45,000	July	48,915
Feb	44,557	Aug	25,515
Mar	25,515	Sep	45,000
Apr	48,915	Oct	25,515
May	45,000	Nov	44,557
June	44,557	Dec	48,915

Sales are collected as follows:

In the month of Sales: 41% In the next month: 25% After 2 months: 8% 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.

1 points

QUESTION 18

Month	Sales $	Month	Sales $
Jan	37,456	July	39,124
Feb	47,996	Aug	47,148
Mar	47,148	Sep	37,456
Apr	39,124	Oct	47,148
May	37,456	Nov	47,996
June	47,996	Dec	39,124

Sales are collected as follows:

In the month of Sales: 20% In the next month: 27% After 2 months: 7% 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.

1 points

QUESTION 19

ABC Company has annual sales of $460,319 and cost of goods sold of $198,600. The average accounts receivable balance is $119,858. 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.

1 points

QUESTION 20

As of this morning, your firm had a ledger balance of $4,294 with no outstanding deposits or checks. Today, your firm deposited 6 checks in the amount of $146 each and wrote 11 checks in the amount of $880 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.

1 points

QUESTION 21

ABC Corporation currently has an inventory turnover of 39.74, a payables turnover of 9.13, and a receivables turnover of 21.02. 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.

1 points

QUESTION 22

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

	No change
	Decrease
	Increase

1 points

QUESTION 23

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

	Decrease
	Increase
	No change

1 points

QUESTION 24

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

	Increase
	Decrease
	No change