QUESTION 1
ABC Company writes 114 checks a day for an average amount of $646 each. These checks generally clear the bank in 5 days. In addition, the firm generally receives an average of $134,521 a day in checks that are deposited immediately. Deposited funds are available in 1 days. What is the firm’s net float?
Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
1 points
QUESTION 2
ABC Corporation currently has an inventory turnover of 13.49, a payables turnover of 13.4, and a receivables turnover of 12.47. How many days are in the cash cycle?
Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.
1 points
QUESTION 3
Which of the following is a Source of Cash? Choose only one.
Increase in long-term debt
Increase in fixed assets
decrease in current liabilities
Increase in current assets
decrease in equity
1 points
QUESTION 4
Compute the Accounts Payable (A/P) period based on the following information:
Average A/P balance = $55,482
Annual Cost of Goods Sold = $183,782
Assume 365 days
Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.
1 points
QUESTION 5
MonthSales $MonthSales $
Jan 19,215July 33,620
Feb 11,663Aug 45,138
Mar 45,138Sep 19,215
Apr 33,620Oct 45,138
May 19,215Nov 11,663
June 11,663Dec 33,620
Sales are collected as follows:
In the month of Sales: 44%
In the next month: 34%
After 2 months: 8%
After 3 months: remainder is collected
Calculate the cash collection for December.
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
1 points
QUESTION 6
ABC Company has an average collection period of 37 days and factors all of its receivables immediately at a 2 percent discount. Assume all accounts are collected in full. What is the firm’s effective cost of borrowing?
Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.
1 points
QUESTION 7
On July 15th, you purchased $10,000 worth of goods. The terms of the sale were 1/6, net 39. What is the effective annual rate of interest for the credit period for this sale?
Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.
1 points
QUESTION 8
As of this morning, your firm had a ledger balance of $4,797 with no outstanding deposits or checks. Today, your firm deposited 6 checks in the amount of $276 each and wrote 14 checks in the amount of $934 each. What is the amount of the disbursement float as of the end of the day?
Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
1 points
QUESTION 9
ABC Company has annual sales of $400,000 and cost of goods sold of $162,848. The accounts payable period is 22.24 days. What is the average accounts payable balance?
Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.
1 points
QUESTION 10
MonthSales $MonthSales $
Jan 13,921July 30,510
Feb 28,928Aug 45,387
Mar 45,387Sep 13,921
Apr 30,510Oct 45,387
May 13,921Nov 28,928
June 28,928Dec 30,510
The company has estimated expenses as follows:
General and administrative expenses: $5,046
Material purchases are 23 percent of sales. Material purchases are paid in the month following the purchase.
Interest payment per month: $4,173
Rent expenses per quarter starting March: $4,381
Calculate the cash outflows for June.
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
1 points
QUESTION 11
ABC Company has annual sales of $335,829 and cost of goods sold of $198,600. The average accounts receivable balance is $111,059. How many days on average does it take the firm to collect its accounts receivable? Assume 365 days.
Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.
1 points
QUESTION 12
The terms of the sale were 4/10, net 60. What is the effective annual rate of interest?
Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.
1 points
QUESTION 13
Identify a source of cash from below. Choose only one.
Decrease in accounts receivable
decrease in current liabilities
Increase in fixed assets
decrease in long-term debt
increase in inventory
1 points
QUESTION 14
MonthSales $MonthSales $
Jan 37,370July 38,809
Feb 48,733Aug 19,093
Mar 19,093Sep 37,370
Apr 38,809Oct 19,093
May 37,370Nov 48,733
June 48,733Dec 38,809
Sales are collected as follows:
In the month of Sales: 42%
In the next month: 20%
After 2 months: 13%
After 3 months: remainder is collected
Calculate the cash collection for November.
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
1 points
QUESTION 15
Compute the cash cycle based on the following information:
Average Collection Period = 50
Accounts Payable Period = 39
Average Age of Inventory = 63
1 points
QUESTION 16
Identify which of the following will increase the operating cycle. Choose only one.
decrease in days’ sales in inventory
Decrease in inventory turnover ratio
decrease in accounts payable period
decrease in average collection period
decrease in accounts payable turnover ratio
1 points
QUESTION 17
Which one of the following is most indicative of a flexible short-term financial policy?
Relatively high ratio of short-term debt to total debt
Relatively low level of inventory
Relatively high ratio of current assets to total assets
Relatively low level of liquidity
Relatively low level of accounts receivable
1 points
QUESTION 18
As of this morning, your firm had a ledger balance of $4,640 with no outstanding deposits or checks. Today, your firm deposited 5 checks in the amount of $357 each and wrote a check in the amount of $626. What is the amount of the collection float as of the end of the day?
Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
1 points
QUESTION 19
MonthSales $MonthSales $
Jan 28,535July 28,324
Feb 40,830Aug 31,601
Mar 31,601Sep 28,535
Apr 28,324Oct 31,601
May 28,535Nov 40,830
June 40,830Dec 28,324
Sales are collected as follows:
In the month of Sales: 43%
In the next month: 26%
After 2 months: 12%
Remainder is considered as bad debt and is not collected.
Calculate the cash collection for June.
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
1 points
QUESTION 20
ABC Corporation currently has an inventory turnover of 12.04, a payables turnover of 9.98, and a receivables turnover of 12.66. How many days are in the operating cycle?
Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.
1 points
QUESTION 21
ABC Company has a cash cycle of 10.25 days, an operating cycle of 20.87 days, and an average collection period of 5 days. The company reported cost of goods sold of $246,175. What is the company’s average balance in Accounts Payable?
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box
1 points
QUESTION 22
Indicate the effect of the following on the operating cycle: Accounts payable goes up
Decrease
Increase
No change
1 points
QUESTION 23
Indicate the effect of the following on the cash cycle: Accounts payable period goes up
Increase
Decrease
No change
1 points
QUESTION 24
Indicate the effect of the following on the operating cycle: Customers take longer to make the payment
No change
Increase
Decrease
