Careful attention to credit sales is important because such sales ________. ruin
ID: 2727140 • Letter: C
Question
Careful attention to credit sales is important because such sales ________. ruin profit streams become accounts receivable are subject to terms of sale set by an industry standards committee have no effect on profitability or liquidity 1 points Question 2 Which of the following actions would MOST directly shorten the cash conversion cycle? Increase inventory. Increase supply expenses. Increase payments received in the first month after the sale. Increase the amount owed creditors. 1 points Question 3 Forty percent of a firm's sales are collected during the first month after the sale; 35% are collected during the second month following the sale; 20% are collected during the third month following the sale; and 5% are collected during the fourth month. What cash is collected in July from May's sales, which totaled $75,000? $30,000 $26,250 $15,000 $3,750 1 points Question 4 The purpose of inventory management is BEST explained as ________. making sure supplies run out before being restocked since inventory is costly making sure to maintain enough inventory to support sales and production, but not too much inventory since inventory is costly making sure that the least amount of inventory is kept in storage at any given time since inventory is costly making decisions about when to restock since inventory is costly 1 points Question 5 Which of the following statements is NOT a purpose for a cash budget? A cash budget indicates when the firm will be profitable. A cash budget indicates when and how much financing the firm will need. A cash budget can be compared with actual results to shape corrective actions. A cash budget can be a method of evaluating an employee's performance. 1 points Question 6 Which of the following statements is false? Unsecured liabilities do not involve the collateral pledge that is essential for secured short-term liabilities. Some forms of secured and unsecured liabilities can provide spontaneous sources of funding. If a firm defaults, unsecured lenders have little claim on the firm's assets whereas secured lenders have first claim to the pledged assets. Both unsecured liabilities and secured liabilities have assets pledged as collateral, but the pledged collateral for an unsecured liability does not equal the borrowed amount. 1 points Question 7 A supplier offers a firm a 4/10, net 30 discount for early payment on a $1500 bill. What is the cost of forgoing the trade discount, assuming the financial year has 360 days? 75% 1125% 1.5% 12% 1 points Question 8 A firm wants to maintain a $20,000 cash balance. In their worst month of the year, the net change in cash shows that they will be short $42,750, which will be offset by a beginning cash balance of $12,650. What amount should the firm finance that month? $42,750 $62,750 $50,100 $32,650 1 points Question 9 A supplier offers a firm a 3/15, net 30 discount for early payment on a $2000 bill. What is the cost of forgoing the trade discount, assuming the financial year has 360 days? 0.003% 1484% 74.2% 37.1% 1 points Question 10 Which of the following is NOT a reason for the importance of working capital management? Improved working capital management improves liquidity. Reducing the costs of short-term financing increases profitability. Current liabilities are not responsive to time-sensitive decisions. Managing assets so that inventory matches current sales can facilitate an inverse relationship between sales and their capital requirements.Explanation / Answer
2 Which of the following actions would MOST directly shorten the cash conversion cycle?
Increase inventory.