Firms typically would prefer a positive working capital versus a negative working capital.

• TRUE

• FALSE

Working capital management involves the management of all of a firm's assets and liabilities.

• TRUE

• FALSE

The image can be best explained as cycle in

• Liquidity cycle

• Cash flow cycle

• Working capital cycle

What is the meaning of the term 2/10 net 30?

• If the invoice is paid within 10 days, a 2% discount can be taken; otherwise the full invoice is due in 30 days.

• If the invoice is paid within 10 days, a 2% discount can be taken. If the invoice is paid between 11 and 29 days, a 1% discount can be taken. After 30 days, the full invoice is due.

• If the invoice is paid within 2 days, a 10% discount can be taken; otherwise a 2% discount can be taken if the invoice is paid in 30 days.

• If the invoice is paid within 2 days, a 10% discount can be taken; otherwise the full invoice is due in 30 days.

Which of the following are the "5-C's of Credit"?

• Cash, Capacity, Capital, Compensation, Collectability

• Character, Capacity, Compensation, Collateral, Conditions

• Character, Cash, Credit, Collateral, Collectability

• Character, Capacity, Capital, Collateral, Conditions

In calculating the economic order level, the total inventory cost consist of_______

• total ordering cost

• total storage cost

• total ordering cost + total storage cost

• total ordering cost - total storage cost

What of the following best describes just-in-time inventory management?

• Inventory is maintained as a buffer to meet uncertainties in demand, supply, and movements of goods.

• A firm acquires inventory precisely when needed for the production, so that its inventory balance is always at, or close to, zero.

• A firm minimizes the time lags present in the supply chain by maintaining a certain amount of inventory to use in these lag times.

Anyone who has bought from a business without payment (buying on credit) is known as a _____________.

• Creditor

• Debtor

Inventory can be in form of

• raw material

• work in progress

• finished goods

• all the answers

"Permanent asset investments are financed with permanent sources, and temporary asset investments are financed with temporary sources".

These refer to the working capital policy ......

• maturity matching approach

• conservative approach

• low risk approach

• headache approach