Question 18 Which of the following is NOT a situation that might lead a firm to
ID: 2665997 • Letter: Q
Question
Question 18
Which of the following is NOT a situation that might lead a firm to increase its holdings of short-term marketable securities?
Answers
The firm must make a known future payment, such as paying for a new plant that is under construction.
The firm is going from its peak sales season to its slack season, so its receivables and inventories will experience a seasonal decline.
The firm is going from its slack season to its peak sales season, so its receivables and inventories will experience seasonal increases.
The firm has just sold long-term securities and has not yet invested the proceeds in operating assets.
The firm just won a product liability suit one of its customers had brought against it.
Question 19
Cass & Company has the following data. What is the firm's cash conversion cycle?
Inventory conversion period =
50 days
Average collection period =
17 days
Payables deferral period =
25 days
Answers
31 days
34 days
38 days
42 days
46 days
Question 20
Singal Inc. is preparing its cash budget. It expects to have sales of $30,000 in January, $35,000 in February, and $35,000 in March. If 20% of sales are for cash, 40% are credit sales paid in the month after the sale, and another 40% are credit sales paid 2 months after the sale, what are the expected cash receipts for March?
Answers
$24,057
$26,730
$29,700
$33,000
$36,300
Which of the following is NOT a situation that might lead a firm to increase its holdings of short-term marketable securities?
Answers
The firm must make a known future payment, such as paying for a new plant that is under construction.
The firm is going from its peak sales season to its slack season, so its receivables and inventories will experience a seasonal decline.
The firm is going from its slack season to its peak sales season, so its receivables and inventories will experience seasonal increases.
The firm has just sold long-term securities and has not yet invested the proceeds in operating assets.
The firm just won a product liability suit one of its customers had brought against it.
Explanation / Answer
Question 18: The firm is going from its peak sales season to its slack season, so its receivables and inventories will experience a seasonal decline The firm is going from its peak sales season to its slack season, so its receivables and inventories will experience a seasonal decline Question 19: 42 days 42 days Question 20: $33,000Thank you....
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