Working capital management includes which of the following? 1. Controlling the inventory level II. Determining when to pay suppliers III. Deciding how much long-term debt to assume IV. Controlling the amount of cash that is readily available OI and II only O I and IV only O II and III only O I, II and IV only

Working capital management includes which of the following? 1. Controlling the inventory level II. Determining when to pay suppliers III. Deciding how much long-term debt to assume IV. Controlling the amount of cash that is readily available OI and II only O I and IV only O II and III only O I, II and IV only

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Select all that is true about the role of financial managers and the types of financial decisions they make. Select one or more: a. Capital structure describes the mix of short-term liabilities a firm uses to finance its short-term assets. b. The optimal financial management strategy of a financial manager is to reduce the overall risk level of the firm. c. The duties of the financial manager includes determining the capital structure and which projects the firm should undertake. Od. Size and timing of cash flows is unimportant in a capital budgeting decision. e. Capital Budgeting function involves planning and determining the firm's short term investments. Of. Determining the appropriate level of inventory is a working capital management function. ZA do W X L
How is the income based valuation model important in the business? Discuss sub topics such as economic value added, capitalization of earnings method and discounted cash flow method
Profitability in working capital management varies directly with ________. a the inability to borrow b risk c liquidity
The increase of acc. Receivable can be include in Inflow in investing activities O Outflow in operation Inflow in operation. O Inflow in the financing activities.
c) In working capital management, there are some actions that increase or decrease long-term debt, cash. To increase the cash account, firms can current liabilities, equity, current assets other than cash, and fixed assets.
What are some tools that companies have to manage their (net operating) working capital? Provide examples of inventory and receivables management techniques. What is the Cash Conversion Cycle and why is this a useful metric? Are there risks if this is too low?
Which of the cash flows would be classified as cash flows from operating activities? i) Cash received from fees earnedii) Cash paid for repayment of loaniii) Cash received from sale of landiv) Cash paid to suppliersv) Cash paid for marketing expenses Options i, ii and ii, Options ii, iv and iii Options v, iv and iii Options i, iv and v
The ratio sales to working capital is a measure ofa. Collectability.b. Operational leverage.c. Liquidity.d. Financial Leverage
Which of the following would increase cash flow for a firm? a. A purchase of fixed assets b. Cash sales c. Purchase of markatable securities d. Credit sales
Which one of the following is a capital structure decision? Group of answer choices Determining the level of accounts receivables. Determining how many shares of stock to issue. Determining how much inventory to keep on hand. Deciding whether or not to purchase a new machine for the production line. Determining how much money should be kept in the checking account.
One of the following statement is true about strategies of liquidity management Select one: O a. Asset Liquidity Management or Asset Conversion Strategy. This strategy calls for storing liquidity in the form of illiquid assets (T-bills, fed funds loans, CDs, etc.) and selling them when liquidity is needed b. Borrowed Liquidity or Liability Management Strategy. This strategy calls for the bank to purchase or borrow from the money market to cover all of its liquidity needs Balanced Liquidity Strategy. The C. use of liquid asset holdings (Asset Management) O d. No need to follow any strategy for liquidity management
is to decide whether the firm should distribute all profits or retain them or distribute a portion and retain the balance O a. Investment Decision Ob. Financing Decision O c.Dividend Decision Od. Liquidity Decision.

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