Fin 340 NAU Exam 2 Questions and Answers with complete solution
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Course
Fin 340 NAU
Institution
Fin 340 NAU
List 4 reasons for a firm would hold cash and marketable securities - ️️1
Transaction balances
2 Compensating balances
3 Pre-cautionary balance
4 Speculative purposes
Complete the following statements with "increase" or "decrease": An increase in
Inventory conversion period will _________...
Fin 340 NAU Exam 2
List 4 reasons for a firm would hold cash and marketable securities - ✔️✔️1
Transaction balances
2 Compensating balances
3 Pre-cautionary balance
4 Speculative purposes
Complete the following statements with "increase" or "decrease": An increase in
Inventory conversion period will _________ the CCC - ✔️✔️increase
True/False:Working capital management is more important for larger firms than smaller
businesses - ✔️✔️False
True/False:There is a close relationship between growth and the need to finance current
assets - ✔️✔️True
True/False:Small business mainly rely on long-term credit and are not concerned with
short-term loans and trade credit - ✔️✔️False
True/False:There is no consequence to holding large amounts of cash within the firm -
✔️✔️False
True/False:Working capital management has to do with managing current asset and
current liability accounts - ✔️✔️True
True/False:Firms can profit by holding less cash - ✔️✔️True
True/False:An aggressive working capital policy would finance large amounts of current
assets with mainly long-term debt - ✔️✔️False
Complete the following statements with "increase" or "decrease": An increase in the
Payable deferral period will __________ the CCC - ✔️✔️decrease
Complete the following statements with "increase" or "decrease":a decrease in the
Average Collection period will ___________ the CCC - ✔️✔️decrease
Which is preferable: A higher CCC or lower CCC? - ✔️✔️Lower
What goes on a Monthly Cash Budget? (if drawing one out is easier than listing, feel
free) - ✔️✔️Inflows(Revenue & Any Loan $),
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