What is the conventional method for financing permanent levels of accounts receivable and inventory?

Seleccione una:

a. Bonds and equity

b. Short-term loans

c. Accounts payable and accrued expenses

d. Equity only

Abbot Corporation has an average collection period of 49 days, an inventory conversion period of 83 days, and a payables deferrable period of 36 days. What is Abbott's cash conversion cycle?

Seleccione una:

a. 96 days

b. 70 days

c. 85 days

d. 132 days

An increase in ________ would increase net working capital.

Seleccione una:

a. plant and equipment

b. accounts payable

c. accounts receivable

d. both B and C

The First Webster Bank requires borrowers to maintain a balance of 10% of the line of credit in a non-interest paying account as compensation for providing the line of credit. If the borrower would not normally have deposits in such an account, the APR will be

Seleccione una:

a. the amount borrowed will be higher than the amount needed.

b. the APR will be less than the stated rate.

c. the amount borrowed will be lower than the amount needed.

d. neither the amount borrowed nor the APR will be affected by the required balance.

According to the self-liquidating debt principle permanent assets should be financed with ________ liabilities.

Seleccione una:

a. permanent

b. spontaneous

c. current

d. fixed

Commercial paper

Seleccione una:

a. rates are generally higher than rates on bank loans and comparable sources of short-term financing.

b. generally has a minimum compensating balance requirement.

c. offers the firm with very large credit needs a single source for all its short-term financing.

d. has all of the properties stated above.