BUSI 320 Read & Interact Chapter 7 Assignment solutions complete answers

BUSI 320 Read & Interact Chapter 7 Assignment solutions complete answers 

 

For most firms the primary reason for holding cash is the        motive.

 

There is a direct relationship between the number of accounts receivable collection days and the accounts receivable balance.

 

As a rule, e commerce tends to ____ the cash flow cycle.

 

Under normal conditions, the longer the maturity period of a security,

 

Acme Company has a credit term policy of 1/10 net 30. For an invoice of $1,000 the customer will pay

 

Just in Time (JIT) inventory management may result in

 

E-commerce tends to have     effect on cash flow.

 

Common examples of Automated Clearinghouse (ACH) transfers include    .

 

Primary credit policy variables that should be considered when considering extending credit are

 

If a company can delay paying vendors until a later date, the disbursement float time will

 

A company with a 30 day credit policy is likely to have ________ need for cash as a company with a 60 day credit policy.

 

A compensating balance is another way of

 

The Economic Order Quantity is determined by

 

Cash balances are largely determined by cash flowing through the business on a     basis as determined by the cash flow cycle.

 

The value of a long term investment issued at 4% interest would _____ in value if rates climb to 6% before maturity?

 

Match the following based on the 5 C’s of credit

 

Cash flow can be improved by

 

Holding cash for use in case cash inflows are less than projected is holding cash for

 

2.
As a general rule, the longer it is to maturity of an investment, the ______ the interest rate
 
 
3.
As the inventory order size goes up
 
 
4.
Certificates of deposits are
 
 
6.
The core objective for a cost-benefit analysis of an important cash collection system should be:
 
 
7.
The core objective for a cost-benefit analysis of an improved cash collection system should be to
 
 
10.
Inventory carrying cost consists of
 
 
12.
Maintaining a safety stock will guard against deliveries due to :
 
 
13.
A matter of concern for some corporations is that accounts receivable with a percent of total assets have ______ relative to inventory
 
 
14.
Money Market Accounts: 
 
 
15.
Several reasons for holding cash transaction balances
 
 
16.
Transaction motives
 
 
18.
What are the 5 C's
 
 
19.
With electronic funds transfer
 
 
 

 

As the inventory order size goes up,

          

 

5 C’s of credit

          

 

A compensating balance is

          

Certificates of deposit are

          

 

The banking system has decreased the amount of time it takes for checks to clear. This change _____ the cash flow

          

 

Inventory can consist of

          

 

 

For most firms, the primary reason for holding cash is the _____ motive

          

As a general rule, the longer it is to maturity of an investment, the ____ the interest rate

          

 

Inventory carrying costs consist of

          

 

A sale made on the retailer’s own credit card would usually result in ____ cash flow cycle than a sale made on a outsider credit card

          

Holding cash to pay planned expenses is a ____motive

          

The core objective for a cost-benefit analysis of an improved cash system should be to determine whether the implementation will

          

 

Maintaining a safety stock will guard against

 

          

If a company has daily remittance of $1M and can save 2 days in the collection process by improving the collection network, cash flow is

          

Holding cash for emergency purposes is a ____ motive

          

Money market accounts

          

 

Passbook savings accounts generally

          

The starting point to calculate cash flow is

          

 

As a rule, an increase in inventory will result in ____ in the cash balance

          

2.
As a general rule, the longer it is to maturity of an investment, the ___ the interest rate.
 
 
3.
As a rule, an increase in inventory will result in ____ in the cash balance.
 
 
4.
As the inventory order size goes up,
 
 
5.
The banking system has decreased the amount of time it takes for checks to clear. This change ___ the cash flow cycle.
 
 
6.
Carrying costs include:
 
 
8.
Certificates of Deposit are
 
 
11.
A common tool to track cash flows and cash balances is
 
 
12.
A compensating balance is
 
 
16.
For most firms, the primary reason for holding cash is the ___ motive.
 
 
17.
Holding cash for emergency purposes is a ___ motive.
 
 
18.
Holding cash to pay planned expenses is a ___ motive.
 
 
20.
Inventory can consist of
 
 
22.
Maintaining a safety stock will guard against late deliveries to:
 
 
23.
Money market accounts are __
 
 
24.
Passbook savings accounts generally
 
 
26.
A rapidly growing business is likely to have a ___ cash balance.
 
 
27.
The starting point to calculate cash flow is ____
 
 
28.
Three main reasons for holding cash are
 
 
29.
The value of a long term investment issued at 4% interest would ___ in value if rates climb to 6% before maturity.
 
 
 

 

1.
40% of short term credit is provided by:
 
 
2.
ac common tool to track cash flows and cash balances is:
 
 
3.
accounts payable is considered a:
 
 
4.
another name for trust receipt financing is:
 
 
5.
the arrangement where goods can only be moved with permission of the lender is called:
 
 
6.
the assets pledged to secure a loan are called:
 
 
7.
the banking system has decreased the amount of time it takes for checks to clear. How does this affect eh cash flow cycle?
 
 
10.
a cash discount is usually a discount allowed for:
 
 
14.
a company that has a higher accounts payable than accounts receivable balance is considered a _________ of trade credit
 
 
15.
a company that has a positive net credit position is considered a _______ of trade credit:
 
 
17.
compound interest can be described as:
 
 
19.
during tight money periods most banks charge _______ the prime rate.
 
 
20.
The economic order quantity is determined by:
 
 
21.
Float is described as:
 
 
22.
for a company that operates in several countries, the financial manager should hold cash in the country with:
 
 
23.
hedging is used to:
 
 
24.
Holding cash for emergency is a:
 
 
25.
holding cash to pay planned expenses is a:
 
 
27.
if a company can increase the payment period to a vendor its cash flow will:
 
 
28.
if a company has its own credit card and does not accept outside credit cards, it is likely cash flow will be     .
 
 
29.
in assessing collection policy quantitative measures that could be applied are:
 
 
30.
an increase in the interest rate will:
 
 
31.
in time value of money problems, a period could be a:
 
 
32.
Inventory can consist of:
 
 
33.
JIT inventory management may result in:
 
 
34.
maintaining a safety stock will guard against:
 
 
36.
Money market accounts
 
 
37.
money market funds generally:
 
 
38.
the rate charged the most credit worthy customers in London is called:
 
 
39.
the relationship between accounts receivable and account payable is called:
 
 
40.
the relationship between accounts receivable and accounts payable is called:
 
 
41.
A sale made on the retailer's own credit card would usually result in _________ cash flow cycle than a sale made on an outside credit card.
 
 
42.
the starting point to calculate cash flow is:
 
 
43.
the time between the sale and the due date of payment is called:
 
 
44.
trade credit is another name for:
 
 
45.
Treasury bills are:
 
 
46.
the Truth in Lending Act applies to:
 
 
47.
the value of a long-term investment issued at 4% interest would ______ in value if rates climb to 6& before maturity.
 
 
48.
What does it mean to sell receivables to the bank with recourse?
 
 
49.
what does it mean to use the accounts receivable as a security?
 
 
 
 
 
 
 
 
 

50.
what is the lender's main goal when making a loan?
 
 
52.
what is true regarding blanket inventory liens?
 
 
53.
what would have the lowest collateral value to a bank or lender: