Financial management quiz 9

Financial leverage emphasizes the impact of using debt in the business.

• True

• False

Level production methods smooth production schedules and utilize manpower and
equipment more efficiently than scasonal production methods

• True

• False

In the management of cash and marketable securities, the primary concern is profitability.

• True

• False

A goal of cash management is to ensure that the inflows and outflows of cash are synchronized.

• True
  

• 
  False

The largest source of short-term funds for most companies is suppliers (trade credit).

• True

• False

1. Inventory is usually divided into three basic categories except

• 1. projected sales.

•   work in progress.

• finished goods.

• raw materials.

What is generally the largest source of short-term credit small firms?

• A. Bank loans

• B Commercial paper
  

• C Installment loans
  

• Trade credit

In determining  the cost of bank financing, which is the important factor?

• A   Prime rate

• B. Nominal rate

• C Effective rate

• D. Discount rate

Working capital management is primarily concerned with the management and financing of

• A. cash and inventory.

• B. current assets and current liabilities.

• C. current assets.

• D. receivables and payables.

The term "permanent current assets" implies

• A. the same thing as fixed assets.

• B. nonmarketable assets.
  

• C. some minimum level of current assets that are not self-liquidating.

• D. inventory.