UMUC FIN 610 Week 9 Quiz with Answers
UMUC FIN 610 Week 9 Quiz with Answers
BUY HERE⬊
1. Which of the following is not a limitation of the Baumol Model?
2. Which one of the following statements is true?
3. Which of the following is not a component of float management?
4. Which of the following is NOT a reason to hold cash?
5. Which of the following is NOT a method used by firms to speed up cash collection?
6. Which one of the following is NOT one of the 5 C's of Credit?
7. UMUC bank has a local subsidiary, which requires $75,000 cash every month. It uses $safe armored trucks service for cash delivery. Service company charges $420 for each delivery.
In order to send cash to its subsidiary, the bank has to liquidate part of its securities portfolio which generates 15% annual return.
How many armored truck service trips PER YEAR should the bank order?
(Hint: The annual rate of return in this question is given as 12 * actual monthly rate of return. You can round off to the nearest whole number, for example if your answer is 17.62, you can answer 18.)
8. You just bought expensive car stereo for $2,400 online at Mississippi Best store. The store offered you a choice – X% discount if you pay right now or you can pay within six months. You can borrow money at your bank at 8.40% per annum compounded monthly.
What is the lowest X% for which you will pay the store right now?
9. In order to faster convert Account Receivable into cash, a company can sell its accounts receivable to another company, called a factor, at a discount.
Assume your average credit sales are $50 million per year and average accounts receivable are $5 million. A factoring company offers you an agreement that it will be buying your accounts receivable at a 2.70% discount. Your bank offers you a credit at R% per year (actual yearly rate).
What would be the minimum R% for which you would choose factoring? That is, what is the rate R% offered by the bank at or below which you would rather borrow money from the bank instead of factoring?
10. Italian car manufacturer Avanti will soon start exporting its luxury cars to the U.S. It expects to sell there 48,000 models annually. Cars will be brought to the U.S. by ship, with a cost of $ 12,000 per trip. Once in the U.S., cars will be stored, which charge $1,000 per month for each car stored there. How many ship trips should the company use per year?
Comments
Post a Comment