Financial Management
A cash discount may best be defined as:
a reduction in price if payment is made within the specified time period
a discount offered to critical suppliers
a discount applied to volume sales
a discount or the repayment of the firm’s debt
a reduction in price if payment is made within the specified time period
Related posts
Operating leverage may be defined as:A. the degree to which debt is used in financing the firm
B. the difference between price and variable costs
C. the extent to which capital assets and fixed costs are utilized
D. the difference between fixed costs and the contribution margin
Financial leverage:
A. reflects the firm’s commitment to fixed, financial assets
B. has no impact on the earning of the firm
C. reflects the amount of debt used in the capital structure of the firm
D. primarily affects the left side of the balance sheet
11. Most retail stores are mainly concerned with:
A. their buyers’ forecasts for the coming season
B. matching sales and inventory levels
C. decreasing inventory turnover
D. their investment in capital assets
The liquidity premium theory suggests that long-term interest rates are higher than short-term interest rates because:
A. investors generally prefer to invest short periods of time
B. government policy maintains this relationship
C. there is greater risk in long-term bonds
D. exchange rate fluctuations establish this relationship
Using a lockbox system to improve collections:
A. is more expensive than the use of collection centers
B. utilizes local banks to clear local payments made to the collection center
C. provides more float than collection centers
D. results in checks being forward to a P.O. box and clearing through local banks
All of the following are factors influencing the choice of marketable securities except:
A. yield
B. maturity
C. marketability
D. maximum investment allowed
In establishing credit standards, the firm must consider the nature of the credit risk based on all of the following, except:
A. prior record of payment
B. terms of credit
C. financial stability
D. current net worth
Leave a Reply