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86. Which one of the following would
not
be included as a source of short-term financing?
87. A self-liquidating line of credit is best illustrated by borrowing:
88. Although commercial paper is unsecured, the companies that issue this short-term
security are:
89. Field warehousing can be an important source of:
90. For the period, a firm collected $38,200 on accounts receivable, paid $19,700 to suppliers
on trade credit, paid $12,000 in cash expenses, purchased for cash a $42,000 piece of equipment
that will be depreciated straight-line to zero over 4 years, and had $59,000 of sales of which 15%
were cash sales. The firm also paid $13,500 in taxes and interest. The beginning cash balance
was $11,300. How much must the firm borrow if it wishes to maintain a minimum cash balance of
$10,000?
91. What is the annual cost of goods sold for a firm with an accounts payable period of 35
days and an average accounts payable of $600,000?
92. What will be the change in net working capital if current assets increase by $170,000 and
current liabilities decrease by $60,000?
93. During the year the following changes were observed.
I. Inventory period increased by 12 days.
II. Receivables period decreased by 6 days.
III. Accounts payable period increased by 4 days.
What is the net change in the cash conversion cycle?
94. The Boat Works started the month with $1.28 million in accounts receivable. Sales for the
month were $3.4 million. The firm collects 35% of its sales in the month of sale with the
remainder paid the following month. What is the accounts receivable balance at month end?
95. The Boat Works started the month with $3.21 million in accounts receivable. Sales for the
month were $7.84 million. The firm collects 18% of its sales in the month of sale with the
remainder paid the following month. What is the accounts receivable balance at month end?
96. A firm that follows a relaxed strategy toward the total capital requirement will be a:
97. Issuing additional long-term debt of $5 million and buying new long-term assets worth $4
million and short-term assets of $1 million will result in a net cash flow of _____ and a change in
net working capital of ____.
98. A firm has $50 million and $60 million credit sales during the first two quarters of the
year. Eighty percent of the receivables are collected in the same quarter and the balance in the
next quarter. What will be the total collection for the firm in the second quarter?
99. If a firm decided to reduce the receivables period by speeding up its collections from its
customers while keeping the inventory period and payables period the same, then the:
100. A firm sells its $1,000,000 of receivables to a factor for $960,000. What is the effective
annual rate on this arrangement if the average collection period is one month?
101. A firm paid out a dividend of $700,000 and repaid $1,000,000 of 6-month notes payable.
The net effect of these transactions on the firm's net working capital is a decrease of:
102. A firm has projected the following values for the next three months:
103. What are some of the major sources of short-term financing and how are interest rates
commonly quoted on these types of loans?
