quiz-ch26 - Questions in[New Questions 1 The Popcorn House...

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Sheet1 Page 1 Questions in [New Questions] 1) The Popcorn House is a wholesale supplier of snack foods and party goods. The firm has projected quarterly sales for next [ ] $138,500 v [ ] $144,000 [ ] $146,000 [ ] $147,500 [ ] $151,000 2) Which one of the following statements is correct? [ ] Carrying costs decrease as the investment in current assets increases. [ ] A firm that reaches its minimum level of total costs at a relatively low level of current assets should adopt a flexible short- t e v [ ] Shortage costs decrease as the level of current assets increases. [ ] A firm that reaches its minimum level of total costs only at a relatively high level of current assets should adopt a restrictiv e [ ] Total costs are at a maximum when shortage costs equal carrying costs. 3) Which one of the following statements is correct? [ ] A long-term interest rate is generally lower than a short-term rate which explains why firms prefer financing all assets with [ ] Firms prefer to finance short-term assets with long-term debt. v [ ] A firm which employs long-term debt to finance all its assets is following a flexible financing policy. [ ] A flexible financing policy entails short-term borrowing to finance seasonal increases in inventory and receivables. [ ] A restrictive financing policy utilizes marketable securities more than it uses short-term debt. 4) Which one of the following is a source of cash? [ ] payment of a $15,000 dividend [ ] investment of $20,000 in inventory v [ ] borrowing $10,000 from a supplier [ ] granting of $1,500 credit to a customer for a sale [ ] buying a $3,000 computer for the firm's office manager 5) The Mayberry Merchant has an accounts receivable period of 30 days and an accounts payable period of 45 days. Purchas e [ ] $9,500 [ ] $10,333 v [ ] $10,667 [ ] $11,333 [ ] $16,000 6) High Tek had sales of $12,000 in November, $16,000 in December, and projects sales of $14,000 in January, $12,000 in F e [ ] $6,500 [ ] $7,800 [ ] $9,200 v [ ] $10,400 [ ] $11,800 7) Bananas and More, a national chain of fruit stands, has an inventory period of two days, an accounts payable period of five [ ] -4 [ ] -3 v [ ] -2 [ ] -1 [ ] 0 8) A firm which needs to raise cash and also reduce the level of its accounts receivables would most likely benefit from:
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Sheet1 Page 2 [ ] obtaining an unsecured short-term loan. [ ] obtaining a committed line of credit. [ ] assigning its receivables on a short-term loan. v [ ] factoring its receivables. [ ] securing a short-term loan with its current assets. 9) High Clover has projected quarterly sales of $36,000, $45,000, $47,000, and $62,000 for the next four quarters, respective l y v [ ] $21,100 [ ] $23,950 [ ] $24,200 [ ] $24,450 [ ] $24,800 10) Brevelier Markets has average inventory of $827,400, an inventory period of 36 days, a receivables period of 22 days, and [ ] 36.67 days v [ ] 47.86 days [ ] 51.08 days [ ] 52.22 days [ ] 56.47 days 11) A firm experiencing short-term cash flow problems can most easily deal with the problem by:
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This note was uploaded on 06/15/2008 for the course ACC 501 504 taught by Professor Na during the Spring '08 term at University of Texas.

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quiz-ch26 - Questions in[New Questions 1 The Popcorn House...

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