QUESTION 1

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

	Decrease
	No change
	Increase

QUESTION 2

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

	Decrease
	Increase
	No change

QUESTION 3

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

	Increase
	No change
	Decrease

QUESTION 4

Month	Sales $	Month	Sales $
Jan	42,818	July	32,470
Feb	12,167	Aug	24,601
Mar	24,601	Sep	42,818
Apr	32,470	Oct	24,601
May	42,818	Nov	12,167
June	12,167	Dec	32,470

Sales are collected as follows:

In the month of Sales: 23% In the next month: 33% After 2 months: 12% After 3 months: remainder is collected

Calculate the cash collection for December.

QUESTION 5

ABC Company has a cash cycle of 11.75 days, an operating cycle of 21.08 days, and an average collection period of 7 days. The company reported cost of goods sold of $235,287. What is the company's average balance in Accounts Payable?

QUESTION 6

OnJuly 15^th, you purchased $10,000 worth of goods. The terms of the sale were 3/8, net 31. 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.

QUESTION 7

As of this morning, your firm had a ledger balance of $3,305 with no outstanding deposits or checks. Today, your firm deposited 9 checks in the amount of $392 each and wrote 13 checks in the amount of $637 each. What is the amount of the disbursement float as of the end of the day?

QUESTION 8

Month	Sales $	Month	Sales $
Jan	16,847	July	23,623
Feb	26,490	Aug	47,697
Mar	47,697	Sep	16,847
Apr	23,623	Oct	47,697
May	16,847	Nov	26,490
June	26,490	Dec	23,623

The company has estimated expenses as follows: General and administrative expenses: $5,788 Material purchases are 22 percent of sales. Material purchases are paid in the month following the purchase. Interest payment per month: $3,995 Rent expenses per quarter starting March: $2,999

Calculate the cash outflows for June.

QUESTION 9

As of this morning, your firm had a ledger balance of $4,201 with no outstanding deposits or checks. Today, your firm deposited 7 checks in the amount of $494 each and wrote a check in the amount of $976. What is the amount of the collection float as of the end of the day?

QUESTION 10

Compute the cash cycle based on the following information:

Average Collection Period = 34 Accounts Payable Period = 44 Average Age of Inventory = 42

QUESTION 11

Month	Sales $	Month	Sales $
Jan	29,547	July	28,671
Feb	15,691	Aug	16,148
Mar	16,148	Sep	29,547
Apr	28,671	Oct	16,148
May	29,547	Nov	15,691
June	15,691	Dec	28,671

Sales are collected as follows:

In the month of Sales: 41% In the next month: 28% After 2 months: 8% Remainder is considered as bad debt and is not collected.

Calculate the cash collection for June.

QUESTION 12

ABC Company writes 151 checks a day for an average amount of $550 each. These checks generally clear the bank in 2 days. In addition, the firm generally receives an average of $160,774 a day in checks that are deposited immediately. Deposited funds are available in 1 days. What is the firm's net float?

QUESTION 13

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

QUESTION 14

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

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

QUESTION 15

ABC Company has annual sales of $473,747 and cost of goods sold of $198,600. The average accounts receivable balance is $67,433. How many days on average does it take the firm to collect its accounts receivable? Assume 365 days.

QUESTION 16

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

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

QUESTION 17

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

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

QUESTION 18

The terms of the sale were 4/6, net 48. What is the effective annual rate of interest?

Enter your answer in percentages rounded off to two decimal points.

QUESTION 19

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

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

QUESTION 20

ABC Corporation currently has an inventory turnover of 28.48, a payables turnover of 8.4, and a receivables turnover of 8.67. How many days are in the cash cycle?

Enter your answer rounded off to two decimal points.

QUESTION 21

ABC Company has an average collection period of 28 days and factors all of its receivables immediately at a 1.3 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.

QUESTION 22

ABC Corporation currently has an inventory turnover of 21.75, a payables turnover of 11.51, and a receivables turnover of 14.23. How many days are in the operating cycle?

QUESTION 23

Month	Sales $	Month	Sales $
Jan	46,126	July	19,302
Feb	44,598	Aug	38,231
Mar	38,231	Sep	46,126
Apr	19,302	Oct	38,231
May	46,126	Nov	44,598
June	44,598	Dec	19,302

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.

QUESTION 24

ABC Company has annual sales of $400,000 and cost of goods sold of $259,091. The accounts payable period is 33.04 days. What is the average accounts payable balance?