Part 7

Topics: United States dollar, Foreign exchange market, Currency Pages: 5 (982 words) Published: May 17, 2015
User
Brooke B Hewitt
Course
BA 520: Financial Strat/Tech(68796-W15)
Test
Part 7 Quiz
Started
1/14/15 2:51 PM
Submitted
1/14/15 6:02 PM
Status
Completed
Attempt Score
75 out of 75 points  
Time Elapsed
3 hours, 11 minutes.
Instructions

Question 1
3 out of 3 points

Net operating working capital is defined as operating current assets minus operating current liabilities..

Correct Answer:
 True

Question 2
3 out of 3 points

Determining a firm's optimal investment in working capital and deciding how that investment should be financed are critical to working capital management.

Correct Answer:
 True

Question 3
3 out of 3 points

An increase in any current asset must be accompanied by an equal increase in some current liability.

Correct Answer:
 False

Question 4
3 out of 3 points

If a firm takes actions that reduce its days sales outstanding (DSO), then, other things held constant, this will lengthen its cash conversion cycle (CCC).

Correct Answer:
 False

Question 5
3 out of 3 points

Other things held constant, if a firm "stretches" (i.e., delays paying) its accounts payable, this will lengthen its cash conversion cycle (CCC).

Correct Answer:
 False

Question 6
3 out of 3 points

Setting up a lockbox arrangement is one way for a firm to speed up the collection of payments from its customers.

Correct Answer:
 True

Question 7
3 out of 3 points

The overriding goal of inventory management is to ensure that the firm never suffers a stock-out, i.e., never runs out of an inventory item.

Correct Answer:
 False

Question 8
3 out of 3 points

The average accounts receivable balance is a function of both the volume of credit sales and the days sales outstanding.

Correct Answer:
 True

Question 9
3 out of 3 points

Changes in a firm's collection policy can affect sales, working capital, and profits.

Correct Answer:
 True

Question 10
3 out of 3 points

Suppose a firm changes its credit policy from 2/10 net 30 to 3/10 net 30. The change is meant to meet competition, so no increase in sales is expected. The average accounts receivable balance will probably decline as a result of this change.

Correct Answer:
 True

Question 11
3 out of 3 points

A line of credit can be either a formal or an informal agreement between a borrower and a bank regarding the maximum amount of credit the bank will extend to the borrower during some future period, assuming the borrower maintains its financial strength.

Correct Answer:
 True

Question 12
3 out of 3 points

Loans from commercial banks generally appear on balance sheets as notes payable. A bank's importance is actually greater than it appears from the dollar amounts shown on balance sheets because banks provide nonspontaneous funds to firms.

Correct Answer:
 True

Question 13
3 out of 3 points

Firms generally choose to finance temporary current operating assets with short-term debt because

Correct Answer:

matching the maturities of assets and liabilities reduces risk under some circumstances, and also because short-term debt is often less expensive than long-term capital.

Question 14
3 out of 3 points

Legal and economic differences among countries, although important, do NOT pose significant problems for most multinational corporations when they coordinate and control worldwide operations of subsidiaries.

Correct Answer:
 False

Question 15
3 out of 3 points

Multinational financial management requires that financial analysts consider the effects of changing currency values.

Correct Answer:
 True

Question 16
3 out of 3 points

Exchange rate quotations consist solely of direct quotations....
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