UMUC FIN 610 Week 8 Quiz with Answers
UMUC FIN 610 Week 8 Quiz with Answers
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1. Which of the following is not a source of cash?
2. A positive cash cycle:
3. Which of the following is not an unsecured loan?
4. A positive cash cycle means that
5. The goal of short-term cash flows management is
6. A firm has:
Amount ($ millions)
| |
Net Working Capital
|
100
|
Other Current Assets
|
105
|
Current Liabilities
|
80
|
7. What is its Cash?
8. A firm has:
Amount ($ millions)
| |
Long-term debt
|
400
|
Equity
|
290
|
Current Liabilities
|
100
|
Other current assets
|
60
|
Cash
|
120
|
9.
10. What is its Fixed assets?
11. A firm wishes to borrow $88,000 The line of credit with its bank requires a 5% compensating balance requirement. What is the loan amount they have to borrow?
12. A firm has a $200,000 line of credit with a 4% compensating balance requirement. The quoted rate on the line is prime +5%, and the prime rate is currently 3.2%. What is the effective annual rate (EAR)?
Note: You don't need to know how much the firm borrows, the EAR will be the same for all borrowings $200,000 or less. However for convenience in calculations, you may assume that the firm borrows $100,000.
13. In this question you will have to compute the effective annual cost of trade credit. Suppose a firm is offered the following the terms are 0.9/9 net 30. Find the annualized interest cost?
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