Compared to capital budgeting and capital structure

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3Compared to capital budgeting and capital structure decisions, consideration of thetime value ofmoney in short-term financial decision making (specially for ‘one-shot’projects) is:a.Equally importantb.Less important *c.More importantd.Not a consideration at all
Ref: page 82Chapter 4:1.Which of the following is NOT one of the primary ways a company can reduce itsinventory investment?
Ref: page 1142The manufacturer of bicycles has just implemented a new sales forecasting modelwhich is much more accurate than the "guesstimates" used in the past. The companyshould consequently
Ref: page 1013The ________________ motive for holding inventory links the level of inventory toongoing anticipated demand.
Ref: page 101
4Torque Manufacturing forecasts that its production will require 500,000 tons ofbauxite over its planning period. Demand for Torque's products is stable over time.Ordering costs amount to an average of $20.00 per order. Holding costs are estimatedat $1.25per ton of bauxite. EOQ for Torque isa.2,200 tonsb.6,000,000 tonsc.4,000 tons *d.5.6tonsSolution: EOQ =square root of [(2xTxF)/H]= square root of [(2x500000x$20)/$1.25]= square root of [16000000] = 4,000Ref: page 103 (equation 4.4)
Chapter 5:1.The financial motive for extending trade credit posits that credit sellers:
Ref: page 1312.Credit scoring models are used to discriminate between good and bad credit applicants.Which of the following items is a major weakness of this approach?
Ref: page 166

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