1. Commercial paper is issued by large firms with excellent credit ratings all f
ID: 2640690 • Letter: 1
Question
1.
Commercial paper is issued by
large firms with excellent credit ratings
all firms
the federal government
small firms with excellent credit ratings
2.
A financial lease is similar to an operating lease, since
the lease payment is not tax deductible
in both cases the lessee has the use of the asset
the lessee owns the asset
in both cases the lease has a maintenance contract
3.
The matching principle suggests that
1, 2, and 3
2 and 3
1 and 3
1 and 2
4.
The yield on a Treasury bill will increase if
the length of time to maturity decreases
bond prices rise
the premium over its face amount increases
the discount increases
5.
The optimal economic order quantity depend on
1 and 2
2 and 3
1, 2, and 3
1 and 3
6.
Which of the following increases net working capital?
an increase in cash and a decrease in accounts receivable
an increase in plant financed by issuing bonds
an increase in preferred stock and a decrease in accounts payable
an increase in bonds and a decrease in equity
7.
Credit policy requires
1 and 3
1 and 2
1, 2, and 3
2 and 3
8.
If a firm has excess cash that will be needed for a required payment after six months, these funds should not be invested in
commercial paper
bankers' acceptances
corporate bonds
tax anticipation notes
9.
Which of the following may not be used to secure a short-term loan?
equipment
inventory
accounts receivable
retained earnings
10.
Term notes sold to the general public
generally have collateral (i.e., are secured)
are usually for twenty years
have variable interest rates
are generally non-callable
11.
The prime rate is
2 and 3
1 and 3
2 and 4
1 and 4
12.
Excess cash may be invested in short-term money market securities such as
1 and 2
1 and 3
1, 2, and 3
2 and 3
13.
The lower the rate of interest, the smaller is
the economic order quantity
the cost of carrying inventory
the safety stock
the number of units sold
14.
More lenient terms of credit will probably decrease
risk
inventory turnover
sales
receivables turnover
15.
If a firm has excess cash that it will need after a period of four months, the financial manager may acquire
1, 2, and 3
1 and 2
1 and 3
2 and 3
I will reward all of my points to the person who can qickly BEST answer all 15 questions.
a.large firms with excellent credit ratings
b.all firms
c.the federal government
d.small firms with excellent credit ratings
Explanation / Answer
11.
The prime rate is
2 and 4
12.
Excess cash may be invested in short-term money market securities such as
1, 2, and 3
13.
The lower the rate of interest, the smaller is
the economic order quantity
14.
More lenient terms of credit will probably decrease
d.
receivables turnover
15.
If a firm has excess cash that it will need after a period of four months, the financial manager may acquire
1 and 3
c.2 and 4
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