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True / False Questionquestion #4Learning Objective: 20-02 Explain why the firm needs to invest in net working capital.Accessibility: Keyboard NavigationBloom's: ComprehensionDifficulty: ModerateGradable: automaticTopic: 20-03 The Components of Working Capital5.A firm's inventory period can be estimated by the ratio of average inventory to daily output.
True / False Questionquestion #5Learning Objective: 20-02 Explain why the firm needs to invest in net working capital.Accessibility: Keyboard NavigationBloom's: ComprehensionDifficulty: ModerateGradable: automaticTopic: 20-03 The Components of Working Capital6.The lower the average level of inventory, the more profitable the firm.
TrueFalseTrue / False Questionquestion #6Accessibility: Keyboard NavigationBloom's: ComprehensionDifficulty: ModerateGradable: automaticLearning Objective: 20-02 Explain why the firm needs to invest in net working capital.Topic: 20-03 The Components of Working Capital7.A firm can reduce the cash conversion cycle by selling fewer goods on credit.
True / False Questionquestion #7Learning Objective: 20-02 Explain why the firm needs to invest in net working capital.Accessibility: Keyboard NavigationBloom's: ComprehensionDifficulty: ModerateGradable: automaticTopic: 20-03 The Components of Working Capital8.Carrying costs are the cost of holding inventory.
True / False Questionquestion #8Accessibility: Keyboard NavigationBloom's: KnowledgeDifficulty: EasyGradable: automaticLearning Objective: 20-02 Explain why the firm needs to invest in net working capital.Topic: 20-03 The Components of Working Capital9.An increase in current liabilities is a source of cash for the firm.TrueFalse
True / False Questionquestion #910. An increase in short-term interest rates will increase the carrying costs of the firm.Accessibility: Keyboard NavigationBloom's: KnowledgeDifficulty: EasyGradable: automaticLearning Objective: 20-02 Explain why the firm needs to invest in net working capital.Topic: 20-03 The Components of Working CapitalTopic: 20-07 Forecast Sources of Cash
True / False Questionquestion #10Accessibility: Keyboard NavigationBloom's: KnowledgeDifficulty: EasyGradable: automaticLearning Objective: 20-02 Explain why the firm needs to invest in net working capital.Topic: 20-03 The Components of Working Capital11. Keeping a large surplus of cash and investing it in Treasury bills will bring positive NPV to a firm.
True / False Questionquestion #11Accessibility: Keyboard NavigationBloom's: ComprehensionDifficulty: ModerateGradable: automaticLearning Objective: 20-02 Explain why the firm needs to invest in net working capital.Topic: 20-04 The Working Capital Trade-Off12. Company which sees a customer pay a $2,500 bill resulting from a previous sale will see a $2,500 increase in cash.

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Term
Spring
Professor
Bower
Tags
Working Capital, cash conversion cycle

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