Question 1

The prime rate charged by big money center banks at any one time is likely to vary greatly (for example,as much as 2 to 4 percentage points)across banks due to banks' ability to differentiate themselves and because different banks operate in different parts of the country.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is CORRECT?

Accepted Answer

A)   Shorter-term cash budgets,in general,are used primarily for planning purposes,while longer-term budgets are used for actual cash control.
B)   The cash budget and the capital budget are developed separately,and although they are both important to the firm,one does not affect the other.
C)   Since depreciation is a non-cash charge,it neither appears on nor has any effect on the cash budget.
D)   The target cash balance should be set such that it need not be adjusted for seasonal patterns and unanticipated fluctuations in receipts,although it should be changed to reflect long-term changes in the firm's operations.
E)   The typical cash budget reflects interest paid on loans as well as income from the investment of surplus cash.These numbers,as well as other items on the cash budget,are expected values;hence,actual results might vary from the budgeted amounts.F) C) and E)
G) C) and D)

Question 3

The calculated cost of trade credit can be reduced by paying late.

Accepted Answer

A) True 
 B)False

Question 4

Synchronization of cash flows is an important cash management technique,as proper synchronization can reduce the required cash balance and increase a firm's profitability.​

Accepted Answer

A) True 
 B)False

Exam 15: Working Capital Management

The calculated cost of trade credit can be reduced by paying late.

Correct Answer
verified

Synchronization of cash flows is an important cash management technique,as proper synchronization can reduce the required cash balance and increase a firm's profitability.

Correct Answer
verified

Which of the following statements is CORRECT?

Correct Answer
verified

The prime rate charged by big money center banks at any one time is likely to vary greatly (for example,as much as 2 to 4 percentage points)across banks due to banks' ability to differentiate themselves and because different banks operate in different parts of the country.

Correct Answer
verified

Exam 15: Working Capital Management

The calculated cost of trade credit can be reduced by paying late.

Correct AnswerverifiedShow Answer

Synchronization of cash flows is an important cash management technique,as proper synchronization can reduce the required cash balance and increase a firm's profitability.​

Correct AnswerverifiedShow Answer

Which of the following statements is CORRECT?

Correct AnswerverifiedShow Answer

The prime rate charged by big money center banks at any one time is likely to vary greatly (for example,as much as 2 to 4 percentage points)across banks due to banks' ability to differentiate themselves and because different banks operate in different parts of the country.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Synchronization of cash flows is an important cash management technique,as proper synchronization can reduce the required cash balance and increase a firm's profitability.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified