Which of the following is a goal of working capital management?

• a.)To meet day to day expenses while minimizing the cost of holding cash
• b.)To meet accounts payable as quickly as possible
• c.)To maximize the overall cost of capital
• d.)To finance inventory costs with bank loans rather than supplier credit

Consider the following data from a company's 90-day operating cycle:

Inventory days: 65

Receivable days: 25

Payable days: 10

What is the cash conversion cycle for this company?

a.)100

b.)50

c.)30

d.)80

With respect to disbursements, a company can manage their cash more efficiently by __________.

a.)using lockbox banking

b.)making use of credit

c.)paying with cash

d.)minimizing float time

Which of the following describes debt securities, rather than equity securities or derivatives?

a.)They are generally the lowest-risk.

b.)They are sold on a public exchange.

c.)They typically generate the largest returns.

d.)They do not have a fixed term.

Place the following steps for developing a credit policy in the correct order of process:

A: The company decides that it wants to prioritize a large volume of sales, even if it means accepting more bad debt

B: The company decides that if a customer fails to pay, they will not pursue legal action.

C: The company decides that it's willing to offer payment terms of 3/10, Net 30.

a.)A, C, B

b.)C, B, A

c.)A, B, C

d.)B, C, A

What type of inventory do flour and milk represent for a baked goods business?

a.)Finished goods

b.)Work in process

c.)Raw materials

d.)Class A Ray has a great idea for a dating app, but he doesn't have the funds to develop and launch it. His brother offers to help him develop it for free, in exchange for a percentage of future profits. What type of financing resource is Ray using? a.)Trade credit b.)Factoring c.)Peer-to-peer lending d.)Sweat equity