Albrecht Inc is a no growth firm whose sales fluctuate seasonally causing total

Albrecht inc is a no growth firm whose sales

This preview shows page 235 - 239 out of 282 pages.

98.Albrecht Inc. is a no-growth firm whose sales fluctuate seasonally, causing total assets to vary from $320,000 to $410,000, but fixed assets remain constant at $260,000. If the firm follows a maturity matching (or moderate)working capital financing policy, what is the most likely total of long-term debt plus equity capital?
Background image
a.$260,642b.$274,360c.$288,800d.$304,000e.$320,000ANS: ELower total asset range$320,000Upper total asset range$410,000Minimum total assets = FA + Min. CA = $320,000 = LT Debt + EquityA maturity matching policy implies that fixed assets and permanent current assets are financed with long-term sources. This is its most likely level of long-term financing.PTS:1DIF:Difficulty: EasyOBJ:LO: 16-2NAT:BUSPROG: AnalyticSTA:DISC: Working capital managementLOC:TBATOP:Maturity matchingKEY:Bloom’s: AnalysisMSC:TYPE: Multiple Choice: Problem99.Brothers Breads has the following data. What is the firm's cash conversion cycle?Inventory conversion period =50 daysAverage collection period =17 daysPayables deferral period =25 daysa.31 daysb.34 daysc.38 daysd.42 dayse.46 daysANS: DInventory conversion period =50 daysAverage collection period =17 daysPayables deferral period =25 daysCCC = Inv. conv. period + Avg. coll. period Pay. def. period = 42 daysPTS:1DIF:Difficulty: EasyOBJ:LO: 16-3NAT:BUSPROG: AnalyticSTA:DISC: Working capital managementLOC:TBATOP:Cash conversion cycleKEY:Bloom’s: Analysis
Background image
MSC:TYPE: Multiple Choice: Problem100.Fireside Inc. has the following data. What is the firm's cash conversion cycle?Inventory conversion period =38 daysAverage collection period =19 daysPayables deferral period =20 daysa.33 daysb.37 daysc.41 daysd.45 dayse.49 daysANS: BInventory conversion period =38 daysAverage collection period =19 daysPayables deferral period =20 daysCCC = Inv. conv. period + Avg. coll. period Pay. def. period = 37 daysPTS:1DIF:Difficulty: EasyOBJ:LO: 16-3NAT:BUSPROG: AnalyticSTA:DISC: Working capital managementLOC:TBATOP:Cash conversion cycleKEY:Bloom’s: AnalysisMSC:TYPE: Multiple Choice: Problem101.Whaley & Whaley has the following data. What is the firm's cash conversion cycle?Inventory conversion period =41 daysAverage collection period =31 daysPayables deferral period =38 daysa.31 daysb.34 daysc.37 daysd.41 dayse.45 daysANS: BInventory conversion period =41 daysAverage collection period =31 days
Background image
Payables deferral period =38 daysCCC = Inv. conv. period + Avg. coll. period Pay. def. period = 34 daysPTS:1DIF:Difficulty: EasyOBJ:LO: 16-3NAT:BUSPROG: AnalyticSTA:DISC: Working capital managementLOC:TBATOP:Cash conversion cycleKEY:Bloom’s: AnalysisMSC:TYPE: Multiple Choice: Problem
Background image
Image of page 239

You've reached the end of your free preview.

Want to read all 282 pages?

  • Spring '14
  • The Land, Strike price, Option time value

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture