Business Finance - Practice Test

[#396] Objectives of management of working capital include

(A) maintenance of satisfactory level of working capital

(B) availability of ample funds at the times of need

(C) Both A and B

(D) None of the above

Correct Answer

(C) Both A and B

[#397] Which of the following statements is correct for a conservative financing policy for a firm relative to a former aggressive policy?

(A) The firm uses long-term financing to finance all fixed and current assets

(B) The firm willsee an increase in its expected profits

(C) The firm willsee an increase in its risk profile

(D) The firm will increase its dividends per share (DPS) in this period

Correct Answer

(A) The firm uses long-term financing to finance all fixed and current assets

[#398] Spy stands for

(A) Securities Pool Vehicle

(B) Special Pool Vehicle

(C) Securities Purpose Vehicle

(D) Special Purpose Vehicle

Correct Answer

(D) Special Purpose Vehicle

[#399] Which is not a form of short-term spontaneous credit?

(A) Commercial paper

(B) Accrued wages

(C) Trade credit

(D) Accrued taxes

Correct Answer

(A) Commercial paper

[#400] Which of the following statement is correct?

(A) For small companies, long-term debt is the principle source of external financing

(B) Current assets of the manufacturing firm account for over a half of its total assets

(C) Strict adherence to the maturity matching approach for financing would call for all current assets to be financed solely with current liabilities

(D) Similar to the capital structure management, working capital management requires the financial manager to make a decision and not address the issue again for several months

Correct Answer

(B) Current assets of the manufacturing firm account for over a half of its total assets

Business Finance - Study Mode

[#396] Objectives of management of working capital include

Correct Answer

[#397] Which of the following statements is correct for a conservative financing policy for a firm relative to a former aggressive policy?

Correct Answer

[#398] Spy stands for

Correct Answer

[#399] Which is not a form of short-term spontaneous credit?

Correct Answer

[#400] Which of the following statement is correct?

Correct Answer