Question 1

Characteristics of a money market deposit account include

Accepted Answer

A)  a lower risk than money market funds.
B)  insurance by federal agencies.
C)  generally a limit of three deposits or withdrawals per month.
D)  All of the optionsE) B) and C)
F) A) and C)

Question 2

The two basic costs associated with inventory are production cost and ordering cost.

Accepted Answer

A) True 
 B)False

Question 3

Float is the difference between the cash balance on the corporate books and the amount currently credited to the corporation by the bank.

Accepted Answer

A) True 
 B)False

Question 4

International cash management systems are more complex than domestic cash management systems because of

Accepted Answer

A)  the risk involved in currency fluctuations.
B)  the changing interest rates across countries.
C)  varying time zones across countries.
D)  All of the optionsE) A) and B)
F) B) and C)

Question 5

In managing cash and marketable securities, what should be the manager's primary concern?

Accepted Answer

A)  Maximization of profit
B)  Maximization of liquid assets
C)  Acceptable return on investment
D)  Liquidity and safetyE) A) and B)
F) B) and C)

Question 6

"Float" is the name given for a short-term loan between suppliers and buyers.

Accepted Answer

A) True 
 B)False

Question 7

If a company would like to reduce their average collection period, they can either offer a cash discount or increase their net terms.

Accepted Answer

A) True 
 B)False

Question 8

One of the major cost savings for consumers using automated clearinghouses is

Accepted Answer

A)  saving great amounts of money on postage.
B)  saving time paying bills through check writing.
C)  the security of having the payments and deposits directly deposited or deducted from your account.
D)  All of the options are true.E) A) and D)
F) B) and C)

Question 9

All of the following are benefits of just-in-time inventory ordering systems except that JIT

Accepted Answer

A)  reduces warehouse space.
B)  saves utility and manpower costs.
C)  reduces inventory costs.
D)  prevents stock outs.E) A) and C)
F) A) and D)

Question 10

Cost-benefit is not a consideration in development of a cash management system, only safety and liquidity.

Accepted Answer

A) True 
 B)False

Question 11

The economic order quantity

Accepted Answer

A)  assumes that inventory usage is seasonal.
B)  assumes that delivery times of each order are consistent.
C)  considers stock-outs.
D)  All of the optionsE) All of the above
F) A) and B)

Question 12

The inventory decision model provides which type of information?

Accepted Answer

A)  Optimal total inventory
B)  Optimal safety stock
C)  Optimal order size
D)  Optimal carrying cost per unitE) A) and C)
F) All of the above

Question 13

Electronic funds transfer will likely increase the use of float.

Accepted Answer

A) True 
 B)False

Exam 7: Current Asset Management

Float is the difference between the cash balance on the corporate books and the amount currently credited to the corporation by the bank.

Correct Answer
verified

The economic order quantity

Correct Answer
verified

Cost-benefit is not a consideration in development of a cash management system, only safety and liquidity.

Correct Answer
verified

If a company would like to reduce their average collection period, they can either offer a cash discount or increase their net terms.

Correct Answer
verified

The inventory decision model provides which type of information?

Correct Answer
verified

One of the major cost savings for consumers using automated clearinghouses is

Correct Answer
verified

Electronic funds transfer will likely increase the use of float.

Correct Answer
verified

"Float" is the name given for a short-term loan between suppliers and buyers.

Correct Answer
verified

Characteristics of a money market deposit account include

Correct Answer
verified

In managing cash and marketable securities, what should be the manager's primary concern?

Correct Answer
verified

International cash management systems are more complex than domestic cash management systems because of

Correct Answer
verified

The two basic costs associated with inventory are production cost and ordering cost.

Correct Answer
verified

All of the following are benefits of just-in-time inventory ordering systems except that JIT

Correct Answer
verified

Exam 7: Current Asset Management

Float is the difference between the cash balance on the corporate books and the amount currently credited to the corporation by the bank.

Correct AnswerverifiedShow Answer

The economic order quantity

Correct AnswerverifiedShow Answer

Cost-benefit is not a consideration in development of a cash management system, only safety and liquidity.

Correct AnswerverifiedShow Answer

If a company would like to reduce their average collection period, they can either offer a cash discount or increase their net terms.

Correct AnswerverifiedShow Answer

The inventory decision model provides which type of information?

Correct AnswerverifiedShow Answer

One of the major cost savings for consumers using automated clearinghouses is

Correct AnswerverifiedShow Answer

Electronic funds transfer will likely increase the use of float.

Correct AnswerverifiedShow Answer

"Float" is the name given for a short-term loan between suppliers and buyers.

Correct AnswerverifiedShow Answer

Characteristics of a money market deposit account include

Correct AnswerverifiedShow Answer

In managing cash and marketable securities, what should be the manager's primary concern?

Correct AnswerverifiedShow Answer

International cash management systems are more complex than domestic cash management systems because of

Correct AnswerverifiedShow Answer

The two basic costs associated with inventory are production cost and ordering cost.

Correct AnswerverifiedShow Answer

All of the following are benefits of just-in-time inventory ordering systems except that JIT

Correct AnswerverifiedShow Answer

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Correct Answer
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