Permanent current assets are: Answer accounts receivable that have become bad de

Question

Permanent current assets are: Answer

accounts receivable that have become bad debts
inventories that have become obsolete
the level of current assets equal to fixed assets
the level of current assets needed to support sales

Commercial finance companies: Answer
make riskier unsecured business loans but charge higher interest rates
specialize in loans secured by inventories and real estate
concentrate their lending activity to firms pledging the notes receivable of their customers
are primarily interested in loans secured by a business customer%u2019s accounts receivable and inventories

A receivable from the sale of merchandise on the basis of a draft or bill of exchange drawn against the buyer or the buyer%u2019s bank is termed a (n): Answer
acceptance
assignment
comaker loan
warehouse loan

The final step in the capital budgeting process is Answer
implementation
selection
follow-up
development

Which one of the following capital-budgeting evaluation techniques is based on finding a discount rate which causes the net present value to be zero? Answer
net present value
internal rate of return
profitability index
payback

Positive NPV projects may originate from cost saving projects such as those that Answer
reduce economies of scale.
create product differentiation.
reduce absolute cost advantages.
fail to exploit advantages in distribution channels.

Explanation / Answer

inventories that have become obsolete

are primarily interested in loans secured by a business customers accounts receivable and inventories

acceptance

development

net present value

create product differentiation.

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