Financial Management - Study Mode
[#606] Offering cash discount to customers result in _______.
Correct Answer
(A) reducing the average collection period
Explanation
Solution: Offering cash discount to customers result in reducing the average collection period. A cash discount is a deduction allowed by some sellers of goods or by some providers of services in order to motivate customers to pay within a specified time. The cash discount is also referred to as an early payment discount.
[#607] The optimal portfolio is the efficient portfolio with the______________.
Correct Answer
(C) highest utility
Explanation
Solution: The optimal portfolio is the efficient portfolio with the highest utility. Portfolio optimization is the process of selecting the best portfolio, out of the set of all portfolios being considered, according to some objective.
[#608] A higher accounts receivable turnover ratio means__________.
Correct Answer
(A) lower debt collection period
Explanation
Solution: A higher accounts receivable turnover ratio mean lower debt collection period. Debtor Collection Period indicates the average time taken to collect trade debts. In other words, a reducing period of time is an indicator of increasing efficiency.
[#609] Market risk is best measured by the____________.
Correct Answer
(B) beta
Explanation
Solution: Market risk is best measured by the beta. Market risk is the possibility of an investor experiencing losses due to factors that affect the overall performance of the financial markets in which he or she is involved.
[#610] Good inventory management is good ________ management.
Correct Answer
(D) purchasing
Explanation
Solution: Good inventory management is good purchasing management. Proper inventory management helps you figure out exactly how much inventory you need to have on-hand. This will help prevent product shortages and allow you to keep just enough inventory without having too much in the warehouse. A good inventory management strategy leads to a more organized warehouse.