Cash-back offer from May 27th to 30th, 2024: Get a flat 10% cash-back credited to your account for a minimum transaction of $50.Post Your Questions Today!

Question DetailsNormal
$ 14.00

DAVENPORT FIN620 WEEK 6 QUIZ (100% SOLUTION)

Question posted by
Online Tutor Profile
request

Question

Question 1

Firms hold cash to satisfy the transaction motive. This means that cash is held:

A. to meet disbursements for normal operations.

B. to balance the flow between cash inflows and outflows.

C. to make unexpected payments such as special price discounts.

D. Both to meet disbursements for normal operations; and to balance the flow between cash inflows and outflows.

E. None of these.

2 points

Question 2

If the total long term financing of the firm is greater than the total financing needs for part of the year, and less than the needs for some of the year due to seasonal fluctuations, the company will most likely:

A. hold excess cash.

B. borrow short term and hold excess cash.

C. hold excess cash and reduce business activities.

D. invest in marketable securities and borrow short term.

E. None of these.

2 points

Question 3

The Timberline firm expects a total cash need of $12,500 over the next 3 months. They have a beginning cash balance of $1,500, and cash is replenished when it hits zero. The fixed cost of selling securities to replenish cash balances is $3.50. The interest rate on marketable securities is 8% per annum. There is a constant rate of cash disbursement and no cash receipts during the month. Based on the firm's current practice, what is the average daily cash balance (a month has 30 days)?

A. $50.00

B. $69.44

C. $94.44

D. $138.89

E. None of these.

2 points

Question 4

The target cash balance is reached when:

A. the interest on any marketable security throw-off is maximized.

B. the interest foregone from not investing in an equivalent amount of Treasury bills is minimized.

C. the value of cash liquidity equals interest foregone on an equivalent amount of Treasury bills.

D. the liquidity value is greater than interest foregone on an equivalent amount of Treasury bills.

E. None of these.

2 points

Question 5

A financial manager should be concerned about bank cash and net float, which is the sum of:

A. collection and book cash.

B. collection float and disbursement float.

C. disbursement float and book cash.

D. disbursement float and bank credit.

E. None of these.

2 points

Question 6

On an average day, Tennis R Us writes checks totaling $2,000. These checks take 3 days to clear. The company receives checks totaling $1,800. These checks take 2 days to clear. The cost of debt is 8%. What is the firm's net float?

A. $-2,500

B. $-2,400

C. $2,400

D. $2,500

E. None of these.

2 points

Question 7

Firms would need to hold zero cash when transactions related needs are:

A. greater than cash inflows.

B. less than cash inflows.

C. not perfectly synchronized with cash inflows.

D. perfectly synchronized with cash inflows.

E. None of these.

2 points

Question 8

Marketability risk is synonymous with:

A. maturity risk.

B. default risk.

C. liquidity risk.

D. interest rate risk.

E. None of these.

2 points

Question 9

The fastest but most expensive way to transfer surplus funds from the local deposit bank to the concentration bank is:

A. a lockbox system.

B. a mail float system.

C. a wire transfer.

D. an in-house processing float system.

E. an availability float system.

2 points

Question 10

On an average day, a company writes checks totaling $1,500. These checks take 7 days to clear. The company receives checks totaling $1,800. These checks take 4 days to clear. The cost of debt is 9%. What is the firm's collection float?

A. $-7,200

B. $-1,800

C. $1,800

D. $10,500

E. None of these.

2 points

Question 11

A firm with low cash balances will need to borrow to cover an unexpected cash outflow:

A. if it has high cash flow variability.

B. if COGS decrease.

C. if the firm maintains a zero lower control limit.

D. Both if it has high cash flow variability and if COGS decrease.

E. Both if it has high cash flow variability and if the firm maintains a zero lower control limit.

2 points

Question 12

Firms hold cash, in part, to satisfy compensating balances. Compensating balances are:

A. cash balances held at the firm in excess of its transactions needs.

B. cash balances held at the firm that are below that of its transactions needs.

C. cash balances held at the firm in excess of its cash inflows.

D. cash balances held at commercial banks to pay implicitly for bank services.

E. None of these.

2 points

Question 13

The Timberline firm expects a total cash need of $12,500 over the next 3 months. They have a beginning cash balance of $1,500, and cash is replenished when it hits zero. The fixed cost of selling securities to replenish cash balances is $3.50. The interest rate on marketable securities is 8% per annum. There is a constant rate of cash disbursement and no cash receipts during the month. Based on the firm's current practice, how many times during the next 3 months will the cash balance be replenished?

A. 3.33 times

B. 4.42 times

C. 8.33 times

D. 13.35 times

E. None of these.

2 points

Question 14

When a firm writes a check, there is an immediate decrease in _____ cash, but no immediate change in _____ cash.

A. bank; collected

B. ledger; book

C. bank; ledger

D. book; bank

E. None of these

2 points 

Question 15

The Timberline firm expects a total cash need of $12,500 over the next 3 months. They have a beginning cash balance of $1,500, and cash is replenished when it hits zero. The fixed cost of selling securities to replenish cash balances is $3.50. The interest rate on marketable securities is 8% per annum. There is a constant rate of cash disbursement and no cash receipts during the month. What is the total fixed order cost for the next three months based on the firm's current practice?

A. $29.17

B. $37.80

C. $55.60

D. $75.60

E. None of these.

2 points 

 

Available Answer
$ 14.00

[Solved] DAVENPORT FIN620 WEEK 6 QUIZ (100% SOLUTION)

  • This Solution has been Purchased 1 time
  • Submitted On 25 Feb, 2016 02:34:02
Answer posted by
Online Tutor Profile
solution
Question Question 1 Firms hold cash to satisfy the transaction motive. This means that cash is held: A. to meet disbursements for normal operations. B. to balance the flow between cash inflows and outflows. C. to make unexpected payments such as special price discounts. D. Both to meet disbursements for normal operations; and to balance the flow between cash inflows and outflows. E. None of these. 2 points Question 2 If the total long term financing of the firm is greater than the total financing needs for part of the year, and less than the needs for some of the year due to seasonal fluctuations, the company will most likely: A. hold excess cash. B. borrow short term and hold excess cash. C. hold excess cash and reduce business activities. D. invest in marketable securities and borrow short term. E. None of these. 2 points Question 3 The Timberline firm expects a total cash need of $12,500 over the next 3 months. They have a beginning cash balance of $1,500, and cash is replenished when it hits zero. The fixed cost of selling securities to replenish cash balances is $3.50. The interest rate on marketable securities is 8% per annum. There is a constant rate of cash disbursement and no cash receipts during the month. Based on the firm's current practice, what is the average daily cash balance (a month has 30 days)? A. $50.00 B. $69.44 C. $94.44 D. $138.89 E. None of these. 2 points Questio...
Buy now to view the complete solution
Other Similar Questions
User Profile
NUMBE...

Test Bank Basic Criminal Law, 5th Edition Anniken Davenport A+

Description MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In order for something to be law, it must: A) make sense. B) have the approval of the citizens. ...
User Profile
Quali...

MKTG 610 Situation Analysis of lululemon Athletica Inc. Davenport University

MKTG 610 Situation Analysis of lululemon Athletica Inc. Davenport University.Abstract lululemon Athletica Inc., known simply as lululemon, is a Canadian sports attire merchant. It is a self-labeled yoga-influence sports at...
User Profile
Quali...

MKTG 610 Cadbury Beverages (Crush Brand) Case Analysis. Davenport University

MKTG 610 Cadbury Beverages (Crush Brand) Case Analysis. Davenport University.Case Recap Cadbury Beverages, Inc. is a beverage-manufacturing subsidiary of Cadbury Schweppes PLC. Cadbury was created in 1969 by a merger of Sc...
User Profile
Quali...

MKTG 610 Promotional Strategy Case Analysis: Wyndham Worldwide. Davenport University

MKTG 610 Promotional Strategy Case Analysis: Wyndham Worldwide. Davenport University.Abstract This paper outlines a promotional strategy for the Wyndham Worldwide Corporation, which is a leading player in the hospitality i...
User Profile
Quali...

MKTG 610 Squirt Beverages: Dr Pepper/ Seven Up Case Analysis. Davenport University

MKTG 610 Squirt Beverages: Dr Pepper/ Seven Up Case Analysis. Davenport University.Case Recap Squirt is a grapefruit flavored soda that is recognized as one of America's best caffeine free, low- sodium soft drinks. It is m...

The benefits of buying study notes from CourseMerits

homeworkhelptime
Assurance Of Timely Delivery
We value your patience, and to ensure you always receive your homework help within the promised time, our dedicated team of tutors begins their work as soon as the request arrives.
tutoring
Best Price In The Market
All the services that are available on our page cost only a nominal amount of money. In fact, the prices are lower than the industry standards. You can always expect value for money from us.
tutorsupport
Uninterrupted 24/7 Support
Our customer support wing remains online 24x7 to provide you seamless assistance. Also, when you post a query or a request here, you can expect an immediate response from our side.
closebutton

$ 629.35