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Unformatted text preview: Sheet1 Page 1 Questions in [New Questions] 1) Roadside Restaurants has a fixed cost of selling securities of $1,100. The firm requires $2.62 million a year for transaction v [ ] $22,135 [ ] $24,318 [ ] $28,909 [ ] $29,911 [ ] $36,548 2) Bledsloe Development has a fixed cost of selling securities of $1,100. Currently, the interest rate on marketable securities h [ ] $867,548 [ ] $922,063 v [ ] $1,024,822 [ ] $1,219,407 [ ] $1,455,045 3) Firms that invest in marketable securities on a temporary basis normally invest in securities that mature in: [ ] 7 days or less. [ ] 30 days or less. [ ] 45 days or less. [ ] 60 days or less. v [ ] 90 days or less. 4) Which one of the following statements is correct regarding investment vehicles used for investing excess funds on a short-t [ ] The level of default risk is irrelevant since the investment is only for the short-term. [ ] The taxability of the income earned on the investment vehicle has no effect on the return earned on a short-term basis. [ ] The longer the maturity, the more appropriate the investment. [ ] All short-term investment vehicles are unaffected by interest rate risk. v [ ] The investment vehicle should be highly marketable. 5) Wendel Painting Supply has set the minimum safety level of cash at $20,000. The estimated standard deviation of the daily [ ] $64,509 [ ] $67,118 v [ ] $84,369 [ ] $87,439 [ ] $90,251 6) The Baumol model: [ ] assumes that cash disbursements increase at a constant rate over time. v [ ] assumes that cash is spent at a constant rate. [ ] includes a safety stock of cash and thus limits the total cash available on a daily basis. [ ] assumes that all cash receipts occur on the first day of each month. [ ] assumes that all cash receipts occur on the last day of each quarter. 7) Greater Erie Stores makes a bank deposit on Friday evening which includes all of the checks the store received that day fro [ ] net float [ ] mail float v [ ] availability float [ ] processing float [ ] disbursement float 8) Western Turf has an average collection delay of 2.2 days and average daily receipts of $284,050. The firm's cost of debt ca Sheet1 Page 2 [ ] $25,564.50 [ ] $56,241.90 [ ] $84,362.85 [ ] $142,025.00 v [ ] $284,050.00 9) Pine River Lodge receives an average of 148 checks per day with an average check amount of $319. On average, the firm [ ] -$116,788 [ ] -$87,247 [ ] -$28,409 [ ] $87,247 v [ ] $116,788 10) British Import Cars requires $3.68 million a year for transaction costs. The fixed cost of selling securities is $840 and the in [ ] $236,409 [ ] $244,021 [ ] $269,318 [ ] $277,609 v [ ] $285,215 11) Cold River Fisheries collects an average of 63 checks per day with an average check amount of $6,492. On average, the [ ] -$860,382 [ ] -$411,909 [ ] $138,414 v [ ] $537,676 [ ] $638,778 12) The present value of eliminating float is equal to the amount of: [ ] mail float....
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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.
- Spring '08