Question

In: Finance

1) A company would use a sweep account to: A. Maintain a zero balance and move...

1) A company would use a sweep account to:

A. Maintain a zero balance and move cash to an interest-earning account

B. Move cash between countries with different currencies

C. Return cash to shareholders

D. Manage the amount of cash available on-hand

3) A company with predictable sales levels would

A. Carry lower levels of safety stock

B. Need higher average inventory levels.

C. Predictability of sales doesn't impact the inventory decision

D. Non of the above

5) In managing collections and disbursements of cash financial manager should look at all these but:

A. Float

B. Improving collections

C. Shortening disbursements

D. Synchronizing cash inflows and outflows

8) The term structure of interest rates shows us:

A. The relative level of shot-term and long-term interest rates at a point in time.

B. How interest rates are expected to change over time

C. What a company would pay to borrow money today.

D. What interest rates have been over the last-ten year period.

12) Season production requires all but:

A. Less inventory storage space

B. Higher overtime costs

C. Lower overall production capacity

D. Seasonal reductions in workforce

Solutions

Expert Solution

1) sweep account means cash flow from one entity to other . so sweep is move cash between countries with different curriencies

the correct amswer is option'B'

3) company with a predictable sales levels would need to maintain higher average inventory levels. so that company can meet a sales levels with out out of stock so option'B' is correct

5) In managing collections and disbursements of cash financial manager should look at all these but float is different . float means difference between bank books and company cash book. company's cash balance as shown on the bank book's . so the difference between bank and firm books is float

8)The term structure of interest rates shows comparision of yields on short term, long term, and medium term at apoint of time.

hence option'A' is correct

9) all are related to season production except High overtime cost. less inventory storag espace, lower overall production capacity and seasonal reduction in work force is related season business. hence option'B' is correct


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