Financial Management - Study Mode

[#631] If A = Annual Requirement, O = Order Cost and C = Carrying Cost per unit per annum, then EOQ:
Correct Answer

(B) $$sqrt {frac{{2{ ext{AO}}}}{{ ext{C}}}} $$

[#632] If a firm has k e > r the Walter's Model suggests for:
Correct Answer

(A) 0% Payout

[#633] Use of safety stock by a firm would:
Correct Answer

(A) Increase Inventory Cost

[#634] In Capital Budgeting, Sunk cost is excluded because it is:
Correct Answer

(B) not incremental

[#635] In finance, "working capital" means the same thing as
Correct Answer

(D) Current assets minus current liabilities.

Explanation

Solution: In finance, "working capital" means the same thing as current assets minus current liabilities. Working capital is the amount of cash a business can safely spend. It's commonly defined as current assets minus current liabilities.