MGT+3062+EXAM+3A

MGT+3062+EXAM+3A - MGT 3062: FINANCIAL MANAGEMENT SPRING...

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MGT 3062: FINANCIAL MANAGEMENT SPRING 2008 EXAM 3 Student: __________________________________________________ID:_____________________________ Choose the best answer to each question. The only answer that will be graded is the answer you bubble in on the scantron. Please write your name on the scantron sheet now. Ethics challenge: I totally and completely upheld the Georgia Tech Honor Code while taking and preparing for this exam. Signature:___________________________ RSVP: I will be dining with the Marchman's Saturday at 5:30. Yes: ______ No: ______ E-mail directions will follow. 1. The length of time between the acquisition of inventory and the collection of cash from receivables is called the: A. operating cycle. B. inventory period. C. accounts payable period. D. accounts receivable period. E. cash cycle. 2. First United pays for an inventory item on day X. On day Y, First United receives payment from the customer who purchased that inventory item. The time period between day X and day Y is called the: A. inventory period. B. cash cycle. C. operating cycle. D. accounts payable period. E. accounts receivable period. ACHIEVE. LEAD. SUCCEED. | THE BUSINESS SCHOOL AT GEORGIA TECH Barry Marchman, Ph.D. Room 407 (404) 894-5110
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3. The length of time between the acquisition of inventory and its subsequent sale is called the: A. accounts payable period. B. accounts receivable period. C. inventory period. D. cash cycle. E. operating cycle. 4. Costs that increase as a firm acquires additional current assets are called _____ costs. A. shortage B. carrying C. trading D. safety E. order 5. Costs that decrease as a firm acquires additional current assets are called _____ costs. A. shortage B. debt C. payables D. carrying E. equity 6. A forecast of cash receipts and disbursements for the next planning period is called a: A. credit analysis. B. statement of cash flows. C. cash budget. D. receivables analysis. E. pro forma income statement. 7. A prearranged, short-term bank loan made on a formal or informal basis, and typically reviewed for renewal annually, is called a(n): A. bank note. B. line of credit. C. letter of credit. D. open loan. E. compensating balance.
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8. Money deposited by a borrower with the bank in a low or non-interest-bearing account as part of a loan agreement is called a: A. letter of credit. B. line of credit. C. compensating balance. D. secured credit deposit. E. pledge. 9. Evans, Inc. has an inventory period of 36 days, an accounts payable period of 44 days, and an accounts receivable turnover rate of 20. What is the length of the cash cycle? A. 26.25 days B. 12.00 days C. 60.00 days D. 61.75 days E. 10.25 days 10. Barkely's has a line of credit with a local bank in the amount of $125,000. The loan agreement calls for interest of 8 percent with a compensating balance of 4 percent, which is based on the total amount borrowed. The compensating balance will be deposited into an interest-free account. What is the effective interest rate on
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MGT+3062+EXAM+3A - MGT 3062: FINANCIAL MANAGEMENT SPRING...

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