FIN 100 WEEK 11 QUIZ

05 Sep FIN 100 WEEK 11 QUIZ

Question 1 

Which of the following is not an advantage of short-term borrowing?

 

flexibility

 

establishing continuous relationships   with a bank or financial institution

 

frequent renewals

 

lower cost

Question 2 

The time between when the firm pays its suppliers and when it collects money from its customers is known as the:

 

operating cycle

 

cash conversion cycle

 

accounts receivable period

 

clearing cycle

Question 3 

Which of the following would not normally be discussed when describing a firm’s operating cycle?

 

manufacturing process

 

selling effort

 

acquiring financing

 

collection period

Question 4 

Working capital does not include:

 

cash

 

accounts receivable

 

marketable securities

 

property, plant, and equipment

Question 5 

The time between ordering materials and collecting cash from receivables is known as the:

 

operating cycle

 

cash conversion cycle

 

accounts receivable period

 

term payable cycle

Question 6 

Which would not be likely to be accepted as collateral for an inventory loan?

 

nails at a hardware store

 

cars at an automobile dealership

 

vegetables at a grocery store

 

TV’s at an appliance store

Question 7 

When old short-term debt is replaced by new short-term debt as the old debt comes due, the process is known as:

 

compensating balance

 

rolling the debt

 

fluctuating financing

 

re-terming

Question 8 

If a firm has positive net working capital, the current ratio is:

 

greater than one

 

less than one

 

equal to one

 

between zero and one

Question 9 

If a firm actually sells its accounts receivable, the process is known as:

 

wholesale financing

 

pledging

 

field crediting

 

factoring

Question 10 

The most important form of short-term business financing is:

 

a revolving credit agreement

 

accounts-receivable financing

 

inventory loans

 

trade credit

Question 11 

The time required for the cumulative cash flows from a project to equal zero is called the:

 

profitability index

 

cash flow time frame

 

project life

 

payback period

Question 12 

If a project has a positive net present value (NPV), then the profitability index is:

 

greater than one

 

less than one

 

equal to one

 

negative

Question 13 

The internal rate of return concept is best explained by which of the following?