Question :
Exhibit 15-1
You working to forecast the cash disbursements for a : 1325763
Exhibit 15-1
You are working to forecast the cash disbursements for a manufacturing company. Sales are forecasted to be $175,000, $200,000, $225,000, and $250,000 for January, February, March, and April, respectively. The firm purchases 25% of each amount in cash and will then pay 70% of the credit purchase in the month following the purchase with the remainder paid in full two months after the purchase.
74.Refer to Exhibit 15-1. What is the amount of February sales to be collected in March for the company?
a.$206,625
b.$105,000
c.$56,250
d.none of the above
75.Refer to Exhibit 15-1. What is the amount of February sales to be collected in April for the company?
a.$206,625
b.$105,000
c.$45,000
d.none of the above
76.Which of the following roles does finance play in long-term planning?
a.Assessing the likelihood that a given strategic objective can be achieved.
b.Evaluating the firm’s existing and prospective sources of funding.
c.Preparing and updating cash budgets to ensure the firm does not face a liquidity crisis.
d.all of the above
e.(b) and (c) only
77.Which of the following roles does finance play in long-term planning?
a.Identifying problems that could develop if the firm’s strategic plans do not develop as expected.
b.Evaluating the firm’s existing and prospective sources of funding.
c.Risk management
d.All of the above
e.(a) and (b) only
78.Which of the following is not a popular growth target?
a.Return on Investment
b.Economic Value Added
c.Market Value Added
d.Growth in Sales or Assets
79.Economic Value Added (EVA) is:
a.the difference between net income and the cost of goods sold.
b.the difference between operating profit and the cost of funds.
c.the difference between net income and the cost of funds.
d.the difference between net operating profits after taxes and the cost of funds.
e.none of the above
80.Which of the following statements is false?
a.The EVA method is conceptually valid but due to the disconnect it has between accrual-based accounting and economic value coupled with increased computational complexity, it is not the most popular method for growth planning.
b.Firms generally assumed that if ROI is greater than the firm’s cost of capital then shareholder value will be created.
c.One of the typical growth targets is depreciation.
d.The popular growth targets tend to rely on accounting data and are typically measured on an annual basis.
81.Which of the following statements is false?
a.A firm should set its growth target equal to its sustainable growth rate.
b.Generating a higher profit margin provides fuel for a higher sustainable growth rate, holding everything else equal.
c.The sustainable growth concept can highlight tensions associated with “competing” objectives within the firm.
d.The primary advantage of the sustainable growth model is its simplicity.
82.The cash budget:
a.is the same as a bank statement.
b.typically spans a one-year time period.
c.relies upon the sales forecast as a key input.
d.is a statement of the firm’s planned inflows and outflows of cash.
e.All of the above except (a)
83.If a firm’s ending cash balance exceeds the desired minimum cash balance:
a.the firm has an excess cash balance that it can invest in short-term marketable securities.
b.the firm has a short-term financing need that it can meet using notes payable.
c.the firm has an excess cash balance that it can meet using notes payable.
d.the firm has a short-tern financing need that it can meet using marketable securities.
84.Which of the following statements is/are true?
a.Almost any functional area in the firm can affect, or be affected by, the cash budget.
b.The cash budget typically only impacts the financing area of the firm.
c.Even if a firm’s cash budget shows that it will have a month-end cash surplus, it may be faced with intramonth cash shortages.
d.All of the above statements are true.
e.Only (a) and (d) are true.
