1. Variables important to credit scoring models include: ( age of company in yea
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1. Variables important to credit scoring models include: ( age of company in years.negative public records.
facility ownership.
all of these.
2. Dun & Bradstreet is known for providing: interest rate information to cash managers.
credit scoring reports that rank a company's payment habits relative to its peer group.
cash management systems to corporate treasurers.
consumer credit reports to credit card companies.
3. A conservatively financed firm would: use long-term financing for all fixed assets and short-term financing for all other assets.
finance a portion of permanent assets and short-term assets with short-term debt.
use equity to finance fixed assets, long-term debt to finance permanent assets, and short-term debt to finance fluctuating current assets.
use long-term financing for permanent current assets and fixed assets and a portion of the short-term fluctuating assets and use short-term financing for all other short-term assets.
4. Frisch Fish Corp expects net income next year to be $750,000. Inventory and accounts receivable will have to be increased by $650,000 to accommodate this sales level. Frisch will pay dividends of $300,000. How much external financing will Frisch Fish need assuming no organically generated increase in liabilities? No external financing is required.
$100,000
$200,000
$300,000
5. Well implemented web-based supply chain management has all of the following benefits except: reduces inventory on hand.
speeds up the ordering and delivery process.
reduces the number of suppliers bidding for a company's business.
decreases overall costs.
6. Genetech has $4,000,000 in assets, have decided to finance 30% with long-term financing (9% rate) and 70% with short-term financing (7%) rate. What will be their annual interest costs? $78,000
$126,000
$440,000
$304,000
7. In managing cash and marketable securities, what should be the manager's primary concern? Maximization of profit
Maximization of liquid assets
Acceptable return on investment
Liquidity and safety
8. International cash management systems are more complex than domestic cash management systems because: many developing countries still use a cash payments system.
some countries rely on electronic funds transfer more than the U.S.
liquidity management, involving short-term cash balances and deficits, has to be managed across international boundaries and time zones and is subject to the risks of currency fluctuations.
none of these.
9. RFID chips have been used to: track livestock.
track marathon runner's time.
track inventory at retailers.
all of these.
10. Retail companies like Target and The Limited exhibit sales patterns that are mostly influenced by: cyclical economic indicators.
competitive prices.
seasonality.
sales promotions.
11. Probably the safest and most marketable instrument for short-term investment is: commercial paper.
large denomination certificates.
Treasury notes.
Treasury bills.
12. Yield curves change daily to reflect: changing conditions in the money and capital markets.
new inflation expectations.
changing conditions in the overall economy.
all of these.
13. A financial executive devotes the most time to: Long-range planning.
Capital budgeting.
Short-term financing.
Working capital management.
14. All of the following are methods of controlling receivables except: offer a cash discount.
reduce net terms.
use DBIS.
reduce cash sales.
15. Generally, more use is made of short-term financing because: short-term interest rates are generally lower than long-term interest rates.
most firms do not have basic access to the capital markets.
short-term financing is usually more predictable than long-term financing.
a and b above.
16. The difference between the amount of cash on the firm's books and the amount credited to it by the bank is: an overdraft.
interest revenue.
extended disbursement.
float.
17. The term "permanent current assets" implies: the same thing as fixed assets.
nonmarketable assets.
some minimum level of current assets that are not self-liquidating.
inventory.
18. An inverted yield curve would suggest that: interest rates are expected to rise.
interest rates are expected to fall.
inflation is expected to rise in the future.
long-term rates are being pushed up by Federal Reserve policy.
19. When developing a credit scoring report, many variables would be considered. Which of the following best represents the major factors Dun & Bradstreet would examine? The age of the management team, the dollar amount of sales, net profits, and long-term debt
The age of the company, the number of employees, the level of current assets
The financial statements, satisfactory or slow payment experiences, negative public records (suits, liens, judgments, bankruptcies)
The company's cash balances, return on equity, and its average tax rates
20. When using the economic order quantity model: ordering costs increase as the level of inventory increases.
carrying costs decrease as the level of inventory increases.
costs are minimized when total carrying costs and total ordering costs are equal.
none of these. 1. Variables important to credit scoring models include: ( age of company in years.
negative public records.
facility ownership.
all of these.
2. Dun & Bradstreet is known for providing: interest rate information to cash managers.
credit scoring reports that rank a company's payment habits relative to its peer group.
cash management systems to corporate treasurers.
consumer credit reports to credit card companies.
3. A conservatively financed firm would: use long-term financing for all fixed assets and short-term financing for all other assets.
finance a portion of permanent assets and short-term assets with short-term debt.
use equity to finance fixed assets, long-term debt to finance permanent assets, and short-term debt to finance fluctuating current assets.
use long-term financing for permanent current assets and fixed assets and a portion of the short-term fluctuating assets and use short-term financing for all other short-term assets.
4. Frisch Fish Corp expects net income next year to be $750,000. Inventory and accounts receivable will have to be increased by $650,000 to accommodate this sales level. Frisch will pay dividends of $300,000. How much external financing will Frisch Fish need assuming no organically generated increase in liabilities? No external financing is required.
$100,000
$200,000
$300,000
5. Well implemented web-based supply chain management has all of the following benefits except: reduces inventory on hand.
speeds up the ordering and delivery process.
reduces the number of suppliers bidding for a company's business.
decreases overall costs.
6. Genetech has $4,000,000 in assets, have decided to finance 30% with long-term financing (9% rate) and 70% with short-term financing (7%) rate. What will be their annual interest costs? $78,000
$126,000
$440,000
$304,000
7. In managing cash and marketable securities, what should be the manager's primary concern? Maximization of profit
Maximization of liquid assets
Acceptable return on investment
Liquidity and safety
8. International cash management systems are more complex than domestic cash management systems because: many developing countries still use a cash payments system.
some countries rely on electronic funds transfer more than the U.S.
liquidity management, involving short-term cash balances and deficits, has to be managed across international boundaries and time zones and is subject to the risks of currency fluctuations.
none of these.
9. RFID chips have been used to: track livestock.
track marathon runner's time.
track inventory at retailers.
all of these.
10. Retail companies like Target and The Limited exhibit sales patterns that are mostly influenced by: cyclical economic indicators.
competitive prices.
seasonality.
sales promotions.
11. Probably the safest and most marketable instrument for short-term investment is: commercial paper.
large denomination certificates.
Treasury notes.
Treasury bills.
12. Yield curves change daily to reflect: changing conditions in the money and capital markets.
new inflation expectations.
changing conditions in the overall economy.
all of these.
13. A financial executive devotes the most time to: Long-range planning.
Capital budgeting.
Short-term financing.
Working capital management.
14. All of the following are methods of controlling receivables except: offer a cash discount.
reduce net terms.
use DBIS.
reduce cash sales.
15. Generally, more use is made of short-term financing because: short-term interest rates are generally lower than long-term interest rates.
most firms do not have basic access to the capital markets.
short-term financing is usually more predictable than long-term financing.
a and b above.
16. The difference between the amount of cash on the firm's books and the amount credited to it by the bank is: an overdraft.
interest revenue.
extended disbursement.
float.
17. The term "permanent current assets" implies: the same thing as fixed assets.
nonmarketable assets.
some minimum level of current assets that are not self-liquidating.
inventory.
18. An inverted yield curve would suggest that: interest rates are expected to rise.
interest rates are expected to fall.
inflation is expected to rise in the future.
long-term rates are being pushed up by Federal Reserve policy.
19. When developing a credit scoring report, many variables would be considered. Which of the following best represents the major factors Dun & Bradstreet would examine? The age of the management team, the dollar amount of sales, net profits, and long-term debt
The age of the company, the number of employees, the level of current assets
The financial statements, satisfactory or slow payment experiences, negative public records (suits, liens, judgments, bankruptcies)
The company's cash balances, return on equity, and its average tax rates
20. When using the economic order quantity model: ordering costs increase as the level of inventory increases.
carrying costs decrease as the level of inventory increases.
costs are minimized when total carrying costs and total ordering costs are equal.
none of these.
Explanation / Answer
7.liquidity and safety
8. liquidity management, involving short-term cash balances and deficits, has to be managed across international boundaries and time zones and is subject to the risks of currency fluctuations.
9. track inventory at retailers.
10.COMPETITIVE PRICES
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