Chap 019

Chapter 19 - Cash and Liquidity Management
Chapter 19 Cash and Liquidity Management

Multiple Choice Questions
1. Yesterday, the president of RB Enterprises recei ed a phone ca!! from "L#, a competitor. "L# is a so!e proprietorship. $n une%pected fami!y situation has caused the o&ner to sudden!y &ant to retire and re!ocate c!oser to his fami!y. 'hus, the assets of "L# are (eing offered to RB Enterprises at a (argain (asement price. )hi!e RB Enterprises had not anticipated purchasing these assets, it &as decided that the opportunity &as too good to pass up. 'his i!!ustrates &hich of the fo!!o&ing needs to ho!d cash* $. precautionary B. transaction C. specu!ati e ". compensation E. f!oat
+. ,' Motors regu!ar!y issues short-term de(t to finance its dai!y operations. -udden!y, the credit mar.ets fro/e and no funds &ere a ai!a(!e for (orro&ing. 0ortunate!y, the firm had some cash reser es sa ed that it &as a(!e to use to fund its operations unti! additiona! credit &as a ai!a(!e. 'he need to retain cash for situations such as this is referred to as &hich one of the fo!!o&ing moti es for ho!ding cash* $. specu!ati e B. f!oat C. compensating ". precautionary E. transaction
1. 'he cash found in a cash dra&er that a chec.-out c!er. uses to ma.e change is an e%amp!e of &hich of the fo!!o&ing moti es for ho!ding cash* $. specu!ati e B. dai!y f!oat C. compensating (a!ance ". precautionary E. transaction
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2. 0!oat is defined as the3 $. amount of cash a firm can immediate!y &ithdra& from its (an. account. B. difference (et&een (oo. cash and (an. cash. C. change in a firm4s cash (a!ance from one accounting period to the ne%t. ". amount of cash a firm has on hand. E. cash (a!ance according to a firm4s records.
5. $ !oc.(o% is a3 $. specia! safe used (y a firm for o ernight storage of any cash or undeposited chec.s. B. specia! safe used (y a firm that can on!y (e opened at prespecified times of the day. C. (o% !ocated in a (an.4s au!t that is rented (y a firm and used to ho!d unprocessed chec.s. ". specia! post office (o% &hich can on!y (e opened (y prespecified posta! inspectors for direct de!i ery to the addressee. E. post office (o% strategica!!y !ocated so that a firm4s recei a(!es can (e co!!ected faster.
6. 'he 7resque 8s!e Center has (ranch operations in three states. Each (ranch dea!s &ith a !oca! (an.. 9o&e er, a!! e%cess funds in these (ranch (an. accounts are transferred on a dai!y (asis to the firm4s primary (an. !ocated near the firm4s home office. 'his routine of transferring cash to the primary (an. on a regu!ar (asis is referred to as3 $. cash concentration. B. strategic cash dis(ursement. C. transfer f!otation. ". paya(!es management. E. f!oat management.
:. $n account into &hich funds are deposited on!y in an amount equa! to the a!ue of the chec.s presented for payment that day is ca!!ed a ;;;;; account. $. !oc.(o% B. concentration C. /ero-(a!ance ". compensating (a!ance E. re o! ing
19-+
<. $n account into &hich a firm transfers funds, usua!!y from a master account, in an amount sufficient to co er the chec.s presented for payment that day is ca!!ed a ;;;;; account. $. !oc.(o% B. c!eanup C. compensating (a!ance ". re o! ing E. contro!!ed dis(ursement
9. 'he -no& 9ut has ana!y/ed the carrying and shortage costs associated &ith its cash ho!dings and determined that the firm shou!d idea!!y maintain a cash (a!ance of =1,6>>. 'his =1,6>> represents &hich one of the fo!!o&ing to the firm* $. target cash (a!ance B. concentration (a!ance C. a ai!a(!e (a!ance ". se!ected cash amount E. compensating (a!ance
1>. $d?ustment costs is another name for &hich one of the fo!!o&ing* $. (orro&ing costs B. shortage costs C. cash transfer costs ". cash &ire costs E. e%cess cash costs
11. )hy do firms need !iquidity* 8. to meet compensating (a!ance requirements 88. to ta.e ad antage of an opportunity that sudden!y arises 888. to conduct dai!y (usiness acti ities 8@. to (e prepared for a financia! emergency $. 8 and 88 on!y B. 888 and 8@ on!y C. 8, 888, and 8@ on!y ". 88, 888, and 8@ on!y E. 8, 88, 888, and 8@
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1+. Cash management primari!y in o! es3 $. optimi/ing a firm4s co!!ections and dis(ursements of cash. B. ma%imi/ing the income a firm earns on its cash reser es. C. reconci!ing a firm4s (oo. (a!ance &ith its (an. (a!ance. ". determining the optima! !e e! of !iquidity a firm shou!d maintain. E. determining the (est method of raising capita!.
11. "is(ursements f!oat3 $. occurs &hen a deposit is recorded (ut the funds are una ai!a(!e. B. causes the (oo. (a!ance to e%ceed the (an. (a!ance. C. has tended to increase since the enactment of the Chec. C!earing $ct for the +1st Century. ". is a recommended source of funds for short-term in estments. E. is e!iminated &hen payments are made e!ectronica!!y.
12. Co!!ection f!oat3 $. is more desira(!e to firms than dis(ursement f!oat. B. is tota!!y e!iminated (y the insta!!ation of a !oc.(o% system. C. e%ists &hen a firm4s a ai!a(!e (a!ance e%ceeds its (oo. (a!ance. ". can (e a oided (y co!!ecting payments e!ectronica!!y at the time of sa!e. E. is e!iminated (y imp!ementing a concentration (an.ing system.
15. )hich one of the fo!!o&ing statements is correct* $. Aet f!oat decreases e ery time a firm issues a chec. to pay one of its supp!iers. B. $ positi e net f!oat indicates that co!!ection f!oat e%ceeds dis(ursements f!oat. C. 0irms prefer a /ero net f!oat o er a positi e net f!oat. ". Aet f!oat is equa! to co!!ection f!oat minus dis(ursement f!oat. E. Aet f!oat is equa! to a firm4s a ai!a(!e (a!ance minus its (oo. (a!ance.
16. Chec. .iting is3 $. used (y most firms as an ethica! means of hand!ing its cash reser es. B. the process of &ithdra&ing a!! funds from a (an. account as soon as the funds are a ai!a(!e. C. the centra! core of a good cash management system. ". using unco!!ected cash to in est in short-term, !iquid assets. E. increasing!y popu!ar due to recent (an.ing !a& changes.
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1:. )hich of the fo!!o&ing &i!! reduce co!!ection time* 8. (i!!ing customers e!ectronica!!y rather than (y mai! 88. accepting de(it cards (ut not chec.s as payment for a sa!e 888. offering cash discounts for ear!y payment 8@. reducing the processing de!ay (y one day $. 8 and 88 on!y B. 8 and 888 on!y C. 8, 88, and 888 on!y ". 88, 888, and 8@ on!y E. 8, 88, 888, and 8@
1<. )hich of the fo!!o&ing shou!d he!p reduce the tota! co!!ection time for a firm* 8. opening a post office (o% so mai! can (e recei ed ear!ier in the morning 88. assigning additiona! staff in the morning to process incoming payments 888. pro iding a discount for customers &ho pay e!ectronica!!y 8@. esta(!ishing preauthori/ed payments from customers $. 8 and 88 on!y B. 888 and 8@ on!y C. 88, 888, and 8@ on!y ". 8, 88, and 8@ on!y E. 8, 88, 888, and 8@
19. )hich one of the fo!!o&ing co!!ection times is correct!y descri(ed* $. 'he processing de!ay starts &hen a firm mai!s out a (i!!ing statement and ends &hen the payment is recei ed from a customer. B. Mai!ing time (egins &hen a firm mai!s out a (i!!ing statement and ends &hen the payment is recei ed. C. Co!!ection time (egins &hen a firm mai!s out a (i!!ing statement and ends &hen the cash payment for that (i!!ing is a ai!a(!e to the firm. ". $ ai!a(i!ity de!ay (egins &hen a firm deposits a customer4s chec. into its (an. account and ends &hen the cash from that payment is a ai!a(!e to the firm. E. 7rocessing de!ay (egins &hen a firm mai!s out (i!!ing statements and ends &hen the firm deposits the payment for that statement into its (an. account.
19-5
+>. $ !oc.(o% system3 $. entai!s the use of a (an. &hich is centra!!y !ocated to co!!ect payments on a nation&ide (asis. B. is designed to deposit a customer4s chec. into the firm4s (an. account prior to recording the receipt of that chec. to a customer4s account. C. is used to reduce the dis(ursement f!oat of a firm. ". is efficient regard!ess of the !ocations se!ected for !oc.(o% destinations. E. automatica!!y records payments to a customer4s account &hen the customer4s chec. is recei ed at the !oc.(o% !ocation.
+1. Loc.(o%es3 $. shou!d (e geographica!!y !ocated c!ose to a firm4s primary customers. B. shou!d (e !ocated in remote !ocations to increase the net dis(ursement f!oat. C. offer no additiona! (enefit to a firm no& that the Chec. C!earing $ct for the +1st Century has (een enacted. ". tend to (e negati e net present a!ue pro?ects for firms &ith a !arge num(er of si/ea(!e transactions. E. tend to a!so (e used as concentration accounts.
++. Cash concentration accounts3 $. tend to increase the funds a ai!a(!e for short-term in esting. B. tend to increase the comp!e%ity of a firm4s cash management system. C. that uti!i/e &ire transfers rather than automated c!earing house transfers are !ess e%pensi e to maintain. ". recei e chec.s direct!y from a!! of a firm4s customers. E. are a!! /ero-(a!ance accounts.
+1. )hich one of the fo!!o&ing statements is correct* $. 0unds recei ed ia automated c!earinghouse transfers are a ai!a(!e that day. B. $ depository transfer chec. is the most cost!y means of transferring funds into a cash concentration account. C. 'he means se!ected to transfer funds into a concentration account depends primari!y upon the si/e of the transfers. ". Concentration accounts are used to transfer funds to !oc.(o% !ocations as needed. E. 'he most e%pedient means of transferring funds into a concentration account is a &ire transfer.
19-6
+2. $ cash concentration account3 $. is frequent!y used as a source of funds for short-term in estments. B. cannot (e used to co er a compensating (a!ance requirement. C. cannot (e used to transfer funds into /ero-(a!ance accounts. ". is genera!!y the on!y (an. account a firm needs to efficient!y manage its cash. E. is another name for a contro!!ed dis(ursement account.
+5. 'he main purpose of a cash concentration account is to3 $. decrease co!!ection f!oat. B. decrease dis(ursement f!oat. C. conso!idate funds. ". rep!ace a !oc.(o% system. E. co er compensating (a!ance requirements.
+6. )hich one of the fo!!o&ing statements is correct concerning a cash management system that emp!oys (oth !oc.(o%es and a concentration (an. account* $. $!! customer payments must (e su(mitted to a !oc.(o%. B. 'he party &hich co!!ects the chec.s from the !oc.(o% is responsi(!e for recording the payment on the customer4s account. C. 7ayments recei ed in a !oc.(o% are transferred immediate!y to the concentration account. ". 'he firm4s cash manager determines ho& the funds in the concentration account are dis(ursed. E. 'he concentration account must (e /eroed out on a dai!y (asis.
+:. $ /ero-(a!ance account3 $. is used to co er the compensating (a!ance requirement of a !ine of credit agreement. B. is on!y used to deposit funds recei ed at !oca! !oc.(o%es. C. is funded on an as-needed (asis on!y. ". is !imited to hand!ing payro!! dis(ursements. E. requires a compensating (a!ance.
19-:
+<. )hich one of the fo!!o&ing statements is correct concerning /ero-(a!ance accounts* $. Each /ero-(a!ance account is offset (y a compensating (a!ance account. B. Bero-(a!ance accounts are used for depositing incoming funds. C. $ master account must (e used in con?unction &ith a /ero-(a!ance account. ". Bero-(a!ance accounts are used so!e!y in con?unction &ith a !oc.(o% system. E. Bero-(a!ance accounts are sti!! required to maintain a minima! (a!ance.
+9. )hich one of the fo!!o&ing statements is correct* $. 'he money mar.et refers to securities that mature in t&o years or !ess. B. Ban.s are prohi(ited from in esting cash surp!uses on (eha!f of their customers on a shortterm (asis. C. -hort-term securities tend to ha e a high degree of interest rate ris.. ". $ cyc!ica! firm may purchase mar.eta(!e securities as part of its short-term financing p!an. E. Corporations are not permitted to in est in money mar.et mutua! funds (ut can in est in (an. money mar.et accounts.
1>. )hich t&o of the fo!!o&ing are the primary reasons &hy firms temporari!y accumu!ate !arge cash surp!uses* 8. cyc!ica! acti ities 88. desire to in est funds 888. dai!y operations 8@. fi%ed asset purchases $. 8 and 888 on!y B. 88 and 8@ on!y C. 8 and 88 on!y ". 888 and 8@ on!y E. 8 and 8@ on!y
11. )hich one of the fo!!o&ing statements is correct* $. Money mar.et accounts are !o&-ris., high-return in estments. B. 'he rate of return earned on short-term securities tends to e%ceed that earned on !ong-term securities. C. C.-. 'reasury (i!!s are &e!! suited for short-term in estments. ". 'he income earned on C.-. 'reasury (i!!s is e%empt from a!! ta%ation. E. -hort-term in estments tend to ha e high !e e!s of defau!t ris..
19-<
1+. Municipa! (onds3 $. are !ess !iquid than C.-. 'reasury (i!!s. B. produce income that is su(?ect to federa! income ta%ation. C. genera!!y pay a higher coupon than corporate (onds. ". are a!so referred to as commercia! paper. E. are issued (y the federa! go ernment.
11. Money mar.et securities ha e &hich of the fo!!o&ing characteristics* 8. !ong maturities 88. !o& defau!t ris. 888. high degree of !iquidity 8@. !o& rates of return $. 8 and 888 on!y B. 88 and 888 on!y C. 8 and 8@ on!y ". 88, 888, and 8@ on!y E. 8, 88, 888, and 8@
12. $ ?um(o C"3 $. is issued (y the federa! go ernment. B. genera!!y matures (et&een + and 5 years. C. is a !oan of =1>>,>>> or more to a municipa!ity. ". is a !oan of =1 mi!!ion or more on a short-term (asis. E. is a short-term !oan of =1>>,>>> or more to a commercia! (an..
15. Bro&n 'ruc.ing is (uying a C.-. 'reasury (i!! today &ith the understanding that the se!!er &i!! (uy it (ac. tomorro& at a s!ight!y higher price. 'his in estment is .no&n as a3 $. commercia! paper transaction. B. repurchase agreement. C. pri ate certificate of deposit. ". re enue anticipation note. E. (i!! anticipation note.
19-9
16. $ repurchase agreement genera!!y has a ma%imum !ife of3 $. 1 day. B. a fe& days. C. one month. ". one to three months. E. three to si% months.
1:. $ money mar.et preferred stoc.3 $. has a f!oating di idend. B. is so!d on!y under a repurchase agreement. C. is a specia! form of commercia! paper. ". has more price o!ati!ity than an ordinary preferred. E. has its interest rate reset dai!y.
1<. )hich of the fo!!o&ing costs re!ated to ho!ding cash are minimi/ed &hen the !e e! of cash a firm ho!ds is optimi/ed* $. opportunity costs B. trading costs C. tota! costs ". (oth trading and opportunity costs E. trading costs, opportunity costs, and tota! costs
19. )hich of the fo!!o&ing statements re!ated to the B$' mode! is correct* 8. 'he B$' mode! is used to determine the target cash (a!ance for a firm. 88. 'he B$' mode! is rare!y used in (usiness due to its comp!e% nature. 888. 'he B$' mode! is a mode! that he!ps e!iminate a firm4s co!!ection f!oat. 8@. Dne disad antage of the B$' mode! is the fact that it assumes a!! cash outf!o&s are .no&n &ith certainty. $. 8 and 88 on!y B. 888 and 8@ on!y C. 88 and 888 on!y ". 8 and 888 on!y E. 8 and 8@ on!y
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2>. )hich of the fo!!o&ing aria(!es are inc!uded in the B$' mode!* 8. upper cash !imit 88. interest rate on mar.eta(!e securities 888. opportunity cost of ho!ding cash 8@. fi%ed cost of each securities trade $. 88 on!y B. 8 and 888 on!y C. 88 and 8@ on!y ". 88, 888, and 8@ on!y E. 8, 888, and 8@ on!y
21. 'he B$' mode! is used to3 $. ma%imi/e the (enefits of !e erage. B. determine the optima! cash position of a firm. C. e!iminate a!! dai!y cash surp!uses. ". ana!y/e the cash (a!ance gi en f!uctuating cash inf!o&s and outf!o&s. E. ma%imi/e the opportunity costs of ho!ding cash.
2+. 'he Mi!!er-Drr mode! assumes that3 $. the cash (a!ance is dep!eted at regu!ar inter a!s. B. a!! cash f!o&s are .no&n &ith certainty. C. the a erage change in the dai!y cash f!o&s is positi e. ". management &i!! set (oth the !o&er and the upper desired !e e!s of cash. E. the cash (a!ance f!uctuates in a random manner.
21. 'he Mi!!er-Drr mode!3 $. recommends se!!ing securities in an amount equa! to ECF - CG &hen the cash (a!ance reaches L. B. requires that mar.eta(!e securities (e so!d &hene er the cash (a!ance fa!!s (e!o& the target !e e!. C. (ases the optima! !e e! of cash so!e!y on the opportunity costs of ho!ding cash. ". supports the argument that the target cash (a!ance dec!ines as order costs increase. E. ad ocates in esting an amount descri(ed as ECF - CG in mar.eta(!e securities &hen the cash (a!ance reaches CF.
19-11
22. )hich of the fo!!o&ing statements is correct* $. $ firm has a greater !i.e!ihood of needing an une%pected !oan &hen its cash f!o&s are re!ati e!y constant o er time. B. 'he cost of (orro&ing affects the target cash (a!ance of a firm. C. Management4s desire to maintain a !o& cash (a!ance has no effect on the (orro&ing needs of a firm. ". 'he target cash (a!ance increases as the interest rate rises. E. 'he target cash (a!ance decreases as the order costs increase.
25. 'he 9o((y -hop has a chec.ing account &ith a !edger (a!ance of =69+. 'he firm has =1,>61 in unco!!ected deposits and =<26 in outstanding chec.s. )hat is the amount of the dis(ursement f!oat on this account* $. => B. =+1: C. =<26 ". =9>9 E. =1,>61
26. Dn an a erage day, 7!astics Enterprises &rites 2+ chec.s &ith an a erage amount of =5<:. 'hese chec.s c!ear the (an. in an a erage of + days. )hat is the a erage amount of the dis(ursement f!oat* $. =1,1:2 B. =5,<>5 C. =+2,652 ". =29,1>< E. =:1,96+
2:. Dn a erage, your firm recei es 6+ chec.s a day from customers. 'hese chec.s, on a erage, are &orth =19.9> each and c!ear the (an. in 1.5 days. 8n addition, your firm dis(urses 1< chec.s a day &ith an a erage amount of =<9.5>. 'hese chec.s c!ear your (an. in + days. )hat is the a erage amount of the co!!ection f!oat* $. =+,2:1.<> B. =1,2>1.>> C. =1,:1>.:> ". =5,1>1.5> E. =6,<>+.>>
19-1+
2<. )hen Chris (a!anced her (usiness chec.(oo., she had an ad?usted (an. (a!ance of =11,21<. -he had + outstanding deposits &orth =<:9 each and 11 chec.s outstanding &ith a tota! a!ue of =1,62<. )hat is the amount of the co!!ection f!oat on this account* $. -=1,<9> B. =1,:5< C. =1,62< ". =5,2>6 E. =6,>1+
29. Your company has an a ai!a(!e (a!ance of =:,911. $ deposit of =+,2<> that &as made this morning is not yet inc!uded in the (an.4s (a!ance. 'here are a!so 2 chec.s outstanding &ith a a!ue of =1+5 each. )hat is the net f!oat* $. net co!!ection f!oat of =1,1<> B. net co!!ection f!oat of =+,2<> C. net f!oat of =6,:11 ". net dis(ursement f!oat of =1,1>> E. net dis(ursement f!oat of =+,2<>
5>. $ firm has =16,:1< in outstanding chec.s that ha e not c!eared the (an.. 'he firm a!so has =11,25> in deposits that ha e (een recorded (y the firm (ut not (y the (an.. 'he current a ai!a(!e (a!ance is =11,2>:. )hat is the status of the net f!oat* $. net co!!ection f!oat of =<,11< B. net co!!ection f!oat of =+,>21 C. net co!!ection f!oat of =11,25> ". net dis(ursement f!oat of =1,+6< E. net dis(ursement f!oat of =5,111
19-11
51. Your firm genera!!y recei es 2 chec.s a month. 'he chec. amounts and the co!!ection de!ay for each chec. is sho&n (e!o&. ,i en this information &hat is the amount of the a erage dai!y f!oat* $ssume a 1> day month.
$. =1,>:> B. =+,111 C. =+,62> ". =+,9>> E. =1,216
5+. 9oyes Lum(er genera!!y recei es 1 chec.s a month. 'he chec. amounts and the co!!ection de!ay for each chec. are sho&n (e!o&. ,i en this information, &hat is the amount of the a erage dai!y f!oat* $ssume each month has 1> days.
$. =1,1<6.6: B. =1,2>:.19 C. =2,:5>.>> ". =6,<11.11 E. =6,911.11
19-12
51. 'he B!ue -tar genera!!y recei es on!y 1 chec.s a month. 'he chec. amounts and the co!!ection de!ay for each chec. are sho&n (e!o&. ,i en this information, &hat is the amount of the a erage dai!y f!oat* $ssume e ery month has 1> days.
$. =9:1.21 B. =1,256.6: C. =1,151.11 ". =5,666.6: E. =6,<>>.>>
52. 'he 0ood )ho!esa!er genera!!y recei es 2 chec.s a month. 'he chec. amounts and the co!!ection de!ay for each chec. are sho&n (e!o&. ,i en this information, &hat is the amount of the a erage dai!y f!oat* $ssume e ery month has 1> days.
$. =1,961.<9 B. =+1,:5>.>> C. =++,+16.6: ". =+<,111.11 E. =15,6:5.>>
19-15
55. 9ot 'u( Bui!ders se!!s to three retai! out!ets. Each retai!er pays once a month in the amounts sho&n (e!o&. 'he co!!ection de!ay associated &ith each payment is a!so gi en (e!o&. )hat is the amount of the a erage dai!y receipts if you assume each month has 1> days*
$. =+,1<9.:> B. =<,19>.>> C. =12,6><.11 ". =+1,<96.9: E. =<1,9>>.>>
56. $t!as Bui!ders dea!s strict!y &ith fi e customers. 'he a erage amount each customer pays per month a!ong &ith the co!!ection de!ay associated &ith each payment is sho&n (e!o&. ,i en this information, &hat is the amount of the a erage dai!y receipts* $ssume e ery month has 1> days.
$. =1,121.11 B. =+,526.6: C. =+,9<1.11 ". =6,166.6: E. =6,<6>.>>
19-16
5:. Aationa! E%porters dea!s strict!y &ith t&o customers. 'he a erage amount each customer pays per month a!ong &ith the co!!ection de!ay associated &ith each payment is sho&n (e!o&. ,i en this information, &hat is the amount of the a erage dai!y receipts* $ssume that e ery month has 1> days.
$. =+,651.11 B. =1,>>6.11 C. =5,1>6.6: ". =:,<11.6: E. =<,6>>.>>
5<. Cross Country 'ruc.ing pro ides transportation ser ices e%c!usi e!y for four customers. 'he a erage amount each customer pays per month a!ong &ith the co!!ection de!ay associated &ith each payment is sho&n (e!o&. ,i en this information, &hat is the &eighted a erage de!ay* $ssume each month has 1> days.
$. +.11 days B. +.+: days C. +.26 days ". +.5> days E. +.:< days
19-1:
59. 9igh Bro& E%press dea!s strict!y &ith t&o customers. 'he a erage amount each customer pays per month a!ong &ith the co!!ection de!ay associated &ith each payment is sho&n (e!o&. ,i en this information, &hat is the &eighted a erage de!ay* $ssume that e ery month has 1> days.
$. 1.:9 days B. 1.<2 days C. +.>> days ". +.>: days E. +.16 days
6>. 'he Meta!!urgica! -pecia!ty Co. dea!s strict!y &ith four customers. 'he a erage amount each customer pays per month a!ong &ith the co!!ection de!ay associated &ith each payment is sho&n (e!o&. ,i en this information, &hat is the &eighted a erage de!ay* $ssume each month has 1> days.
$. 1.9< days B. +.>2 days C. +.>9 days ". +.16 days E. +.+1 days
19-1<
61. Dn an a erage day, ,oose "o&n 0eathers recei es =+,2>> in chec.s from customers. 'hese chec.s c!ear the (an. in an a erage of 1.: days. 'he app!ica(!e dai!y interest rate is >.>2 percent. )hat is the present a!ue of the f!oat* $ssume each month has 1> days. $. =115.+> B. =61<.2> C. =+,2>>.>> ". =2,><>.>> E. =2,+56.5>
6+. Dn an a erage day, 'o&n Center 9ard&are recei es =+,2+> in chec.s from customers. 'hese chec.s c!ear the (an. in an a erage of +.1 days. 'he app!ica(!e dai!y interest rate is >.>+5 percent. )hat is the ma%imum amount this store shou!d pay to comp!ete!y e!iminate its co!!ection f!oat* $ssume each month has 1> days. $. =1,15+.1< B. =1,+<<.15 C. =+,1>9.16 ". =2,61:.11 E. =5,><+.>>
61. Dn an a erage day, your firm recei es =11,<>> in chec.s from customers. 'hese chec.s c!ear the (an. in an a erage of +.1 days. 'he app!ica(!e dai!y interest rate is >.>15 percent. )hat is the highest dai!y fee your firm shou!d pay to comp!ete!y e!iminate the co!!ection f!oat* $ssume each month has 1> days. $. =1.2+ B. =1.:+ C. =1:.:< ". =12.1< E. =1:.+>
19-19
62. Dn an a erage day, )i!son H )i!son recei es =:,<>> in chec.s from customers. 'hese chec.s c!ear the (an. in an a erage of 1.: days. 'he app!ica(!e dai!y interest rate is >.>++ percent. )hat is the highest dai!y fee this firm shou!d pay to comp!ete!y e!iminate its co!!ection f!oat* $ssume each month has 1> days. $. =1.:+ B. =+.9+ C. =1:.+> ". =+2.1> E. =+9.1:
65. Your a erage customer is !ocated 2.1 mai!ing days a&ay from your firm. You ha e determined that, on a erage, it is ta.ing your staff 1.5 days to process payments recei ed from customers. 8n addition, it ta.es an a erage of +.+ days for your funds to (e a ai!a(!e for use once you ha e made your (an. deposit. )hat is your firm4s co!!ection time* $. +.+ days B. 1.: days C. 2.1 days ". 5.< days E. <.> days
66. 8t ta.es your firm 2.5 days to prepare and mai! out a!! the month!y statements to your customers. Dn a erage, the mai! time (et&een your firm and your customers is +.6 days. Customer chec.s ta.e an a erage of 1.< days to c!ear the (an.. You ha e determined that your tota! a erage co!!ection time is 6.1 days. 9o& !ong, on a erage, does it ta.e your firm to process the payments from customers* $. 1.: days B. +.6 days C. 2.2 days ". 2.< days E. 6.+ days
19-+>
6:. Current!y, your firm requires + days to process the chec.s &hich customers mai! in to pay for their credit purchases. 'he a erage mai! time associated &ith these payments is +.1 days and the chec. c!earing time is +.1 days. 8f your firm adopts a !oc.(o% system, the mai! time &i!! (e cut in ha!f. 8n addition, if emp!oyees are reassigned, chec.s cou!d (e processed the same day they are recei ed. 9o& !ong &i!! your co!!ection time (e if (oth the !oc.(o% system and the ?o( reassignments are imp!emented* $. 1.<5 days B. 2.1> days C. 2.+5 days ". 2.2> days E. 2.55 days
6<. You are considering imp!ementing a !oc.(o% system for your firm. 'he system is e%pected to reduce the a erage co!!ection time (y 1.+ days. Dn an a erage day, your firm recei es 1+> chec.s &ith an a erage a!ue of =99 each. 'he dai!y interest rate on 'reasury (i!!s is >.>12 percent. )hat is the anticipated amount of the dai!y sa ings if this system is imp!emented* $. =+.61 B. =1.+9 C. =2.25 ". =5.1+ E. =5.:<
69. Roger4s "istri(utors recei es an a erage of +16 chec.s a day. 'he a erage amount per chec. is =6+9. 'he firm is considering a !oc.(o% system &hich it anticipates &i!! reduce the a erage co!!ection time (y 1.5 days. 'he dai!y interest rate on 'reasury (i!!s is >.>11 percent. )hat is the amount of the e%pected dai!y sa ings of the !oc.(o% system* $. =+.>2 B. =6.9+ C. =12.95 ". =1<.1> E. =++.2+
19-+1
:>. 9and 'oo!s, 8nc. recei es an a erage of 611 chec.s a day. 'he a erage amount per chec. is =2+5. 'he firm is considering a !oc.(o% system &hich it anticipates &i!! reduce the a erage co!!ection time (y 1 day. 'he (an. charges =>.+:5 a chec. for this ser ice. 'he dai!y interest rate on 'reasury (i!!s is >.>11 percent. )hat is the a erage dai!y cost of the !oc.(o% system* $. =11.16 B. =52.19 C. =16<.>1 ". =1<>.11 E. =199.19
:1. You are considering imp!ementing a !oc.(o% system for your firm. 'he system is e%pected to reduce the a erage co!!ection time (y 1.1 days. Dn an a erage day, your firm recei es 116 chec.s &ith an a erage a!ue of =+19 each. 'he dai!y interest rate on 'reasury (i!!s is >.>+1 percent. 'he (an. charge per chec. is =>.++. )hat is the anticipated dai!y cost of the !oc.(o% system* $. =1.2< B. =6.+5 C. =1+.6> ". =+9.9+ E. =16.1:
:+. You are considering imp!ementing a !oc.(o% system for your firm. 'he system is e%pected to reduce the a erage co!!ection time (y +.< days. Dn an a erage day, your firm recei es +,219 chec.s &ith an a erage a!ue of =1,+<: each. 'he dai!y interest rate on 'reasury (i!!s is >.>16 percent. 'he (an. charge per chec. is =>.1>. )hat is the net present a!ue of this !oc.(o% arrangement* $. -=2,515,6+5 B. -=+,611,5:5 C. =1<:,219 ". =2,1<1,2<1 E. =11,+5+,:11
19-++
:1. Rose&e!! 8nternationa! recei es an a erage of +6< chec.s a day &ith an a erage amount per chec. of =<+>. 'he firm is considering a !oc.(o% system &hich it anticipates &i!! reduce the a erage co!!ection time (y 1.2 days. 'he (an. charges =>.+1 a chec. for this ser ice. 'he dai!y interest rate on 'reasury (i!!s is >.>+ percent. )hat is the net present a!ue of this !oc.(o% arrangement* $. -=61,62> B. -=+6,+62, C. =+6,+62 ". =1>,<+> E. =61,62>
:2. 'he E!iot Co. needs =1<5,>>> a &ee. to pay (i!!s. 'he standard de iation of the &ee.!y dis(ursements is =1:,6>>. 'he firm has esta(!ished a !o&er cash (a!ance !imit of =:5,>>>. 'he app!ica(!e interest rate is 5.5 percent and the fi%ed cost of transferring funds is =2:. Based on the B$' mode!, &hat is the optima! initia! cash (a!ance* $. =9>,66< B. =9:,515 C. =1>2,121 ". =1+<,++2 E. =116,5>9
:5. 'heo4s Bar H ,ri!! needs =12:,>>> a &ee. to pay (i!!s. 'he standard de iation of the &ee.!y dis(ursements is =9,6>>. 'he firm has esta(!ished a !o&er cash (a!ance !imit of =2>,>>>. 'he app!ica(!e interest rate is 1.5 percent and the fi%ed cost of transferring funds is =25. Based on the B$' mode!, &hat is the optima! a erage cash (a!ance* $. =16,199 B. =29,56< C. =:>,1>> ". =99,116 E. =11+,2>>
19-+1
:6. 7ar.&ay E%press needs =11<,>>> a &ee. to pay (i!!s. 'he standard de iation of the &ee.!y dis(ursements is =11,>>>. 'he firm has esta(!ished a !o&er cash (a!ance !imit of =6>,>>>. 'he app!ica(!e interest rate is 2.5 percent and the fi%ed cost of transferring funds is =65. Based on the B$' mode!, &hat is the opportunity cost of ho!ding cash* $. =1,<:1 B. =2,91< C. =5,+>: ". =1>9,+<1 E. =11>,22>
::. 7enco -upp!y spends =2+<,>>> a &ee. to pay (i!!s and maintains a !o&er cash (a!ance !imit of =:5,>>>. 'he standard de iation of its dis(ursements is =1<,9>>. 'he app!ica(!e interest rate is 5 percent and the fi%ed cost of transferring funds is =65. )hat is the firm4s optima! initia! cash (a!ance (ased on the B$' mode!* $. =15>,6>> B. =15<,9+9 C. =1:>,>96 ". =++1,5>6 E. =+2>,551
:<. Your firm spends =52,>>> a &ee. to pay (i!!s and maintains a !o&er cash (a!ance !imit of =25,>>>. 'he standard de iation of your dis(ursements is =1+,1>>. 'he app!ica(!e interest rate is 2.5 percent and the fi%ed cost of transferring funds is =55. )hat is your opportunity cost of ho!ding cash (ased on the B$' mode!* $. =1,11< B. =1,<62 C. =+,+>2 ". =+,111 E. =1,:>9
19-+2
:9. Rosie D4,rady4s spends =9<,>>> a &ee. to pay (i!!s and maintains a !o&er cash (a!ance !imit of =95,>>>. 'he standard de iation of the dis(ursements is =12,6>>. 'he app!ica(!e interest rate is 2.< percent and the fi%ed cost of transferring funds is =5>. )hat is this firm4s tota! cost of ho!ding cash (ased on the B$' mode!* $. =1,211 B. =+,<6+ C. =1,>12 ". =2,91+ E. =2,926
<>. Your firm spends =126,>>> a &ee. to pay (i!!s and maintains a !o&er cash (a!ance !imit of =15>,>>>. 'he standard de iation of your dis(ursements is =+<,:>>. 'he app!ica(!e interest rate is 5 percent and the fi%ed cost of transferring funds is =6>. )hat is your optima! a erage cash (a!ance (ased on the B$' mode!* $. =1>1,9>> B. =126,5>> C. =1<+,+>> ". =+>:,<>> E. =+29,9>>
<1. 'he Co& 7ie -preader Co. spends =+12,>>> a &ee. to pay (i!!s and maintains a !o&er cash (a!ance !imit of =1:5,>>>. 'he standard de iation of the dis(ursements is =16,>>>. 'he app!ica(!e &ee.!y interest rate is >.>+5 percent and the fi%ed cost of transferring funds is =29. )hat is the firm4s cash (a!ance target (ased on the Mi!!er-Drr mode!* $. =+><,511 B. =+2:,56> C. =+51,>>6 ". =+52,525 E. =+5<,<:<
19-+5
<+. 'he B!ue Moon 9ote! and -pa spends =159,>>> a &ee. to pay (i!!s and maintains a !o&er cash (a!ance !imit of =+5>,>>>. 'he standard de iation of the dis(ursements is =26,<>>. 'he app!ica(!e &ee.!y interest rate is >.>25 percent and the fi%ed cost of transferring funds is =6>. )hat is the hote!4s optima! upper cash !imit (ased on the Mi!!er-Drr mode!* $. =21>,<16 B. =22:,9>5 C. =5+<,:>> ". =:19,259 E. =<61,6:+
<1. "ona!dson, 8nc. spends =92,>>> a &ee. to pay (i!!s and maintains a !o&er cash (a!ance !imit of =5>,>>>. 'he standard de iation of the dis(ursements is =11,>>>. 'he app!ica(!e &ee.!y interest rate is >.>25 percent and the fi%ed cost of transferring funds is =5+. )hat is your optima! a erage cash (a!ance (ased on the Mi!!er-Drr mode!* $. =:<,::< B. =<+,6+1 C. =+11,969 ". =+16,112 E. =+2:,<6<
<2. 'he Burger -top spends =5+,>>> a &ee. to pay (i!!s and maintains a !o&er cash (a!ance !imit of =6>,>>>. 'he standard de iation of the dis(ursements is =:,5>>. 'he app!ica(!e &ee.!y interest rate is >.>2 percent and the fi%ed cost of transferring funds is =5>. )hat is your optima! a erage cash (a!ance (ased on the Mi!!er-Drr mode!* $. =:9,116 B. =<1,+>< C. =11>,115 ". =+1:,12< E. =+29,6+2
19-+6
<5. Your firm spends =2<,>>> a &ee. to pay (i!!s and maintains a !o&er cash (a!ance !imit of =5>,>>>. 'he standard de iation of the dis(ursements is =<,6>>. 'he app!ica(!e &ee.!y interest rate is >.>52 percent and the fi%ed cost of transferring funds is =65. )hat is your cash (a!ance target (ased on the Mi!!er-Drr mode!* $. =2<,156 B. =29,99> C. =52,<<2 ". =6<,<1> E. =:5,:+6
<6. 'ra e! 8nn E%press spends =1>9,>>> a &ee. to pay (i!!s and maintains a !o&er cash (a!ance !imit of =1+5,>>>. 'he standard de iation of the dis(ursements is =12,2>>. 'he app!ica(!e &ee.!y interest rate is >.>19 percent and the fi%ed cost of transferring funds is =5<. )hat is the inn4s cash (a!ance target (ased on the Mi!!er-Drr mode!* $. =+<,29+ B. =11,159 C. =151,29+ ". =156,159 E. =++5,21:
Essay Questions
<:. E%p!ain ho& a !oc.(o% system operates and &hy a firm might consider imp!ementing such a system.
19-+:
<<. E%p!ain ho& the Chec. C!earing $ct for the +1st Century affects (oth co!!ection and dis(ursement f!oat.
<9. E%p!ain ho& the unethica! use of unco!!ected funds has (een impacted (y the gro&th of on-!ine retai!ing and (an.ing.
9>. 0!oat management systems may pro ide on!y minima! (enefits to a firm. ,i en that most firms ha e other pro?ects &ith higher positi e net present a!ues, &hy shou!d a firm4s managers spend time imp!ementing a f!oat management system*
91. E%p!ain &hat a /ero-(a!ance account is, ho& it is used, and ho& it affects cash management.
19-+<

9+. Each (usiness day, on a erage, a company &rites chec.s tota!ing =+6,>>> to pay its supp!iers. 'he usua! c!earing time for the chec.s is 5 days. Mean&hi!e, the company is recei ing payments from its customers each day, in the form of chec.s, tota!ing =2>,>>>. 'he cash from the payments is a ai!a(!e to the firm after + days. )hat is the amount of the firm4s a erage net f!oat* $. =1>,>> B. =5>,>>> C. =<>,>>> ". =11>,>>> E. =11>,>>>
91. 7urp!e 0eet )ine, 8nc. recei es an a erage of =6,>>> in chec.s per day. 'he de!ay in c!earing is typica!!y 1 days. 'he current interest rate is >.>+5 percent per day. $ssume 1> days per month. )hat is the highest dai!y fee the company shou!d (e &i!!ing to pay to e!iminate its f!oat entire!y* $. =1.5> B. =1.>> C. =1.:5 ". =2.5> E. =6.>>
92. Your neigh(or goes to the post office once a month and pic.s up t&o chec.s, one for =1<,>>> and one for =2,>>>. 'he !arger chec. ta.es 2 days to c!ear after it is depositedI the sma!!er one ta.es 6 days. $ssume 1> days per month. )hat is the &eighted a erage de!ay* $. 2.+1 days B. 2.16 days C. 2.:< days ". 5.>> days E. 6.>> days
19-+9
95. Your firm has an a erage receipt si/e of =6>. $ (an. has approached you concerning a !oc.(o% ser ice that &i!! decrease your tota! co!!ection time (y 1 day. You typica!!y recei e +<,>>> chec.s per day. 'he dai!y interest rate is >.>16 percent. )hat is the A7@ of the !oc.(o% pro?ect if the (an. charges a fee of =+1> per day* $. =16:,5>> B. =2+:,5>> C. =9>1,15> ". =1,21+,5>> E. =1,6<>,>>>
96. $ mai!-order firm processes 5,>>> chec.s per month. Df these, 55 percent are for =55 and 25 percent are for =65. 'he =55 chec.s are de!ayed + days on a erageI the =65 chec.s are de!ayed 5 days on a erage. $ssume each month has 1> days. 'he interest rate is 6 percent per year. 9o& much shou!d the firm (e &i!!ing to pay to reduce the &eighted a erage f!oat (y 1.2 days* $. =2,165 B. =11,<<1 C. =21,65> ". =11<,<<1 E. =216,5>>
9:. 7aper -u(marine Manufacturing is in estigating a !oc.(o% system to reduce its co!!ection time. 8t has determined the fo!!o&ing3
'he tota! co!!ection time &i!! (e reduced (y + days if the !oc.(o% system is adopted. )hat is the A7@ of adopting the !oc.(o% system* $. =6>>,>>> B. =::5,>>> C. =9:5,>>> ". =1,+>>,>>> E. =1,2+5,>>>
19-1>
9<. 9ome Roasted 'ur.eys dis(urses chec.s e ery 2 &ee.s that a erage =:>,>>> and ta.e 5 days to c!ear. 9o& much interest can the company earn if it de!ays transfer of funds from an interest-(earing account that pays >.>+ percent per day for these 5 days* 8gnore the effects of compound interest. $ssume 5+ &ee.s in a year. $. =16 B. =91 C. =1<+ ". =162 E. =91>
99. Ae er $gain Enterprises has an agreement &ith 'he )orth Ban. &here(y the (an. hand!es =1.1+ mi!!ion in co!!ections a day and requires a =1,>>>,>>> compensating (a!ance. Ae er $gain is contemp!ating cance!ing the agreement and di iding its eastern region so that t&o other (an.s &i!! hand!e its (usiness. Ban.s $ and B &i!! each hand!e =1.56 mi!!ion of co!!ections a day, and each requires a compensating (a!ance of =1,55>,>>>. Ae er $gain4s financia! management e%pects that co!!ections &i!! (e acce!erated (y one day if the eastern region is di ided. 'he '-(i!! rate is 5 percent annua!!y. )hat is the amount of the annua! net sa ings if this p!an is adopted* $. =1>,+>> B. =51,>>> C. =:6,5>> ". =1>+,>>> E. =1+5,>>>
19-11
1>>. Mountaintop 8nns, a #entuc.y company, has determined that a ma?ority of its customers are !ocated in the 7ennsy! ania area. 8t therefore is considering using a !oc.(o% system offered (y a (an. !ocated in 7itts(urgh, 7ennsy! ania. 'he (an. has estimated that use of the system &i!! reduce co!!ection time (y one day. 8n addition to the aria(!e charge sho&n (e!o&, there is a!so a fi%ed charge of =2,1+> per year for the !oc.(o% system. $ssume a year has 165 days. )hat is the A7@ of the !oc.(o% system gi en the fo!!o&ing information*
$. -=156,:+: B. -=111,1>1 C. -=:2,+>< ". =11,5>: E. =+6,211
1>1. Co& Chips, 8nc., a !arge ferti!i/er distri(utor (ased in Ca!ifornia, is p!anning to use a !oc.(o% system to speed up co!!ections from its customers !ocated on the East Coast. $ 7hi!ade!phia-area (an. &i!! pro ide this ser ice for an annua! fee of =+5,>>> p!us 1> cents per transaction. 'he estimated reduction in co!!ection and processing time is one day. 'he a erage customer payment in this region is =<,+>>. 'reasury (i!!s are current!y yie!ding 5 percent per year. $ssume a year has 165 days. $ppro%imate!y ho& many customers each day, on a erage, are needed to ma.e the system profita(!e for Co& Chips, 8nc.* $. 56 B. 6: C. :2 ". <1 E. <9
19-1+
Chapter 19 Cash and Liquidity Management $ns&er #ey
1. Yesterday, the president of RB Enterprises recei ed a phone ca!! from "L#, a competitor. "L# is a so!e proprietorship. $n une%pected fami!y situation has caused the o&ner to sudden!y &ant to retire and re!ocate c!oser to his fami!y. 'hus, the assets of "L# are (eing offered to RB Enterprises at a (argain (asement price. )hi!e RB Enterprises had not anticipated purchasing these assets, it &as decided that the opportunity &as too good to pass up. 'his i!!ustrates &hich of the fo!!o&ing needs to ho!d cash* $. precautionary B. transaction C. specu!ati e ". compensation E. f!oat Refer to section 19.1
AACSB: N/A Bloom's: Comprehension Difficulty: Basic Learning Objecti e: !"#! Section: !"$! %opic: Speculati e moti e
19-11
+. ,' Motors regu!ar!y issues short-term de(t to finance its dai!y operations. -udden!y, the credit mar.ets fro/e and no funds &ere a ai!a(!e for (orro&ing. 0ortunate!y, the firm had some cash reser es sa ed that it &as a(!e to use to fund its operations unti! additiona! credit &as a ai!a(!e. 'he need to retain cash for situations such as this is referred to as &hich one of the fo!!o&ing moti es for ho!ding cash* $. specu!ati e B. f!oat C. compensating D. precautionary E. transaction Refer to section 19.1
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#! Section: !"$! %opic: )recautionary moti e
1. 'he cash found in a cash dra&er that a chec.-out c!er. uses to ma.e change is an e%amp!e of &hich of the fo!!o&ing moti es for ho!ding cash* $. specu!ati e B. dai!y f!oat C. compensating (a!ance ". precautionary E. transaction Refer to section 19.1
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#! Section: !"$! %opic: %ransaction moti e
19-12
2. 0!oat is defined as the3 $. amount of cash a firm can immediate!y &ithdra& from its (an. account. B. difference (et&een (oo. cash and (an. cash. C. change in a firm4s cash (a!ance from one accounting period to the ne%t. ". amount of cash a firm has on hand. E. cash (a!ance according to a firm4s records. Refer to section 19.+
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: +loat
5. $ !oc.(o% is a3 $. specia! safe used (y a firm for o ernight storage of any cash or undeposited chec.s. B. specia! safe used (y a firm that can on!y (e opened at prespecified times of the day. C. (o% !ocated in a (an.4s au!t that is rented (y a firm and used to ho!d unprocessed chec.s. ". specia! post office (o% &hich can on!y (e opened (y prespecified posta! inspectors for direct de!i ery to the addressee. E. post office (o% strategica!!y !ocated so that a firm4s recei a(!es can (e co!!ected faster. Refer to section 19.1
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#* Section: !"$, %opic: Loc-bo.
19-15
6. 'he 7resque 8s!e Center has (ranch operations in three states. Each (ranch dea!s &ith a !oca! (an.. 9o&e er, a!! e%cess funds in these (ranch (an. accounts are transferred on a dai!y (asis to the firm4s primary (an. !ocated near the firm4s home office. 'his routine of transferring cash to the primary (an. on a regu!ar (asis is referred to as3 A. cash concentration. B. strategic cash dis(ursement. C. transfer f!otation. ". paya(!es management. E. f!oat management. Refer to section 19.1
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#* Section: !"$, %opic: Cash concentration
:. $n account into &hich funds are deposited on!y in an amount equa! to the a!ue of the chec.s presented for payment that day is ca!!ed a ;;;;; account. $. !oc.(o% B. concentration C. /ero-(a!ance ". compensating (a!ance E. re o! ing Refer to section 19.2
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#* Section: !"$/ %opic: 0ero#balance accounts
19-16
<. $n account into &hich a firm transfers funds, usua!!y from a master account, in an amount sufficient to co er the chec.s presented for payment that day is ca!!ed a ;;;;; account. $. !oc.(o% B. c!eanup C. compensating (a!ance ". re o! ing E. contro!!ed dis(ursement Refer to section 19.2
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#* Section: !"$/ %opic: Controlle( (isbursement account
9. 'he -no& 9ut has ana!y/ed the carrying and shortage costs associated &ith its cash ho!dings and determined that the firm shou!d idea!!y maintain a cash (a!ance of =1,6>>. 'his =1,6>> represents &hich one of the fo!!o&ing to the firm* A. target cash (a!ance B. concentration (a!ance C. a ai!a(!e (a!ance ". se!ected cash amount E. compensating (a!ance Refer to section 19.$
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#, Section: !"$A %opic: %arget cash balance
19-1:
1>. $d?ustment costs is another name for &hich one of the fo!!o&ing* $. (orro&ing costs B. shortage costs C. cash transfer costs ". cash &ire costs E. e%cess cash costs Refer to section 19.$
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#, Section: !"$A %opic: A(justment costs
11. )hy do firms need !iquidity* 8. to meet compensating (a!ance requirements 88. to ta.e ad antage of an opportunity that sudden!y arises 888. to conduct dai!y (usiness acti ities 8@. to (e prepared for a financia! emergency $. 8 and 88 on!y B. 888 and 8@ on!y C. 8, 888, and 8@ on!y ". 88, 888, and 8@ on!y E. 8, 88, 888, and 8@ Refer to section 19.1
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#! Section: !"$! %opic: 1oti es for li2ui(ity
19-1<
1+. Cash management primari!y in o! es3 A. optimi/ing a firm4s co!!ections and dis(ursements of cash. B. ma%imi/ing the income a firm earns on its cash reser es. C. reconci!ing a firm4s (oo. (a!ance &ith its (an. (a!ance. ". determining the optima! !e e! of !iquidity a firm shou!d maintain. E. determining the (est method of raising capita!. Refer to section 19.1
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#! Section: !"$! %opic: Cash management
11. "is(ursements f!oat3 $. occurs &hen a deposit is recorded (ut the funds are una ai!a(!e. B. causes the (oo. (a!ance to e%ceed the (an. (a!ance. C. has tended to increase since the enactment of the Chec. C!earing $ct for the +1st Century. ". is a recommended source of funds for short-term in estments. E. is e!iminated &hen payments are made e!ectronica!!y. Refer to section 19.+
AACSB: N/A Bloom's: Comprehension Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: Disbursement float
19-19
12. Co!!ection f!oat3 $. is more desira(!e to firms than dis(ursement f!oat. B. is tota!!y e!iminated (y the insta!!ation of a !oc.(o% system. C. e%ists &hen a firm4s a ai!a(!e (a!ance e%ceeds its (oo. (a!ance. D. can (e a oided (y co!!ecting payments e!ectronica!!y at the time of sa!e. E. is e!iminated (y imp!ementing a concentration (an.ing system. Refer to section 19.+
AACSB: N/A Bloom's: Comprehension Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: Collection float
15. )hich one of the fo!!o&ing statements is correct* $. Aet f!oat decreases e ery time a firm issues a chec. to pay one of its supp!iers. B. $ positi e net f!oat indicates that co!!ection f!oat e%ceeds dis(ursements f!oat. C. 0irms prefer a /ero net f!oat o er a positi e net f!oat. ". Aet f!oat is equa! to co!!ection f!oat minus dis(ursement f!oat. E. Aet f!oat is equa! to a firm4s a ai!a(!e (a!ance minus its (oo. (a!ance. Refer to section 19.+
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: Net float
19-2>
16. Chec. .iting is3 $. used (y most firms as an ethica! means of hand!ing its cash reser es. B. the process of &ithdra&ing a!! funds from a (an. account as soon as the funds are a ai!a(!e. C. the centra! core of a good cash management system. D. using unco!!ected cash to in est in short-term, !iquid assets. E. increasing!y popu!ar due to recent (an.ing !a& changes. Refer to section 19.+
AACSB: 3thics Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: 3thical issue
1:. )hich of the fo!!o&ing &i!! reduce co!!ection time* 8. (i!!ing customers e!ectronica!!y rather than (y mai! 88. accepting de(it cards (ut not chec.s as payment for a sa!e 888. offering cash discounts for ear!y payment 8@. reducing the processing de!ay (y one day $. 8 and 88 on!y B. 8 and 888 on!y C. 8, 88, and 888 on!y ". 88, 888, and 8@ on!y E. 8, 88, 888, and 8@ Refer to section 19.1
AACSB: N/A Bloom's: Comprehension Difficulty: Basic Learning Objecti e: !"#* Section: !"$, %opic: Collection time
19-21
1<. )hich of the fo!!o&ing shou!d he!p reduce the tota! co!!ection time for a firm* 8. opening a post office (o% so mai! can (e recei ed ear!ier in the morning 88. assigning additiona! staff in the morning to process incoming payments 888. pro iding a discount for customers &ho pay e!ectronica!!y 8@. esta(!ishing preauthori/ed payments from customers $. 8 and 88 on!y B. 888 and 8@ on!y C. 88, 888, and 8@ on!y ". 8, 88, and 8@ on!y E. 8, 88, 888, and 8@ Refer to section 19.1
AACSB: N/A Bloom's: Comprehension Difficulty: Basic Learning Objecti e: !"#* Section: !"$, %opic: Collection time
19. )hich one of the fo!!o&ing co!!ection times is correct!y descri(ed* $. 'he processing de!ay starts &hen a firm mai!s out a (i!!ing statement and ends &hen the payment is recei ed from a customer. B. Mai!ing time (egins &hen a firm mai!s out a (i!!ing statement and ends &hen the payment is recei ed. C. Co!!ection time (egins &hen a firm mai!s out a (i!!ing statement and ends &hen the cash payment for that (i!!ing is a ai!a(!e to the firm. D. $ ai!a(i!ity de!ay (egins &hen a firm deposits a customer4s chec. into its (an. account and ends &hen the cash from that payment is a ai!a(!e to the firm. E. 7rocessing de!ay (egins &hen a firm mai!s out (i!!ing statements and ends &hen the firm deposits the payment for that statement into its (an. account. Refer to section 19.1
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#* Section: !"$, %opic: Collection time
19-2+
+>. $ !oc.(o% system3 $. entai!s the use of a (an. &hich is centra!!y !ocated to co!!ect payments on a nation&ide (asis. B. is designed to deposit a customer4s chec. into the firm4s (an. account prior to recording the receipt of that chec. to a customer4s account. C. is used to reduce the dis(ursement f!oat of a firm. ". is efficient regard!ess of the !ocations se!ected for !oc.(o% destinations. E. automatica!!y records payments to a customer4s account &hen the customer4s chec. is recei ed at the !oc.(o% !ocation. Refer to section 19.1
AACSB: N/A Bloom's: Comprehension Difficulty: Basic Learning Objecti e: !"#* Section: !"$, %opic: Loc-bo.
+1. Loc.(o%es3 A. shou!d (e geographica!!y !ocated c!ose to a firm4s primary customers. B. shou!d (e !ocated in remote !ocations to increase the net dis(ursement f!oat. C. offer no additiona! (enefit to a firm no& that the Chec. C!earing $ct for the +1st Century has (een enacted. ". tend to (e negati e net present a!ue pro?ects for firms &ith a !arge num(er of si/ea(!e transactions. E. tend to a!so (e used as concentration accounts. Refer to section 19.1
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#* Section: !"$, %opic: Loc-bo.
19-21
++. Cash concentration accounts3 A. tend to increase the funds a ai!a(!e for short-term in esting. B. tend to increase the comp!e%ity of a firm4s cash management system. C. that uti!i/e &ire transfers rather than automated c!earing house transfers are !ess e%pensi e to maintain. ". recei e chec.s direct!y from a!! of a firm4s customers. E. are a!! /ero-(a!ance accounts. Refer to section 19.1
AACSB: N/A Bloom's: Comprehension Difficulty: Basic Learning Objecti e: !"#* Section: !"$, %opic: Cash concentration
+1. )hich one of the fo!!o&ing statements is correct* $. 0unds recei ed ia automated c!earinghouse transfers are a ai!a(!e that day. B. $ depository transfer chec. is the most cost!y means of transferring funds into a cash concentration account. C. 'he means se!ected to transfer funds into a concentration account depends primari!y upon the si/e of the transfers. ". Concentration accounts are used to transfer funds to !oc.(o% !ocations as needed. E. 'he most e%pedient means of transferring funds into a concentration account is a &ire transfer. Refer to section 19.1
19-22
+2. $ cash concentration account3 A. is frequent!y used as a source of funds for short-term in estments. B. cannot (e used to co er a compensating (a!ance requirement. C. cannot (e used to transfer funds into /ero-(a!ance accounts. ". is genera!!y the on!y (an. account a firm needs to efficient!y manage its cash. E. is another name for a contro!!ed dis(ursement account. Refer to section 19.1
+5. 'he main purpose of a cash concentration account is to3 $. decrease co!!ection f!oat. B. decrease dis(ursement f!oat. C. conso!idate funds. ". rep!ace a !oc.(o% system. E. co er compensating (a!ance requirements. Refer to section 19.1
19-25
+6. )hich one of the fo!!o&ing statements is correct concerning a cash management system that emp!oys (oth !oc.(o%es and a concentration (an. account* $. $!! customer payments must (e su(mitted to a !oc.(o%. B. 'he party &hich co!!ects the chec.s from the !oc.(o% is responsi(!e for recording the payment on the customer4s account. C. 7ayments recei ed in a !oc.(o% are transferred immediate!y to the concentration account. D. 'he firm4s cash manager determines ho& the funds in the concentration account are dis(ursed. E. 'he concentration account must (e /eroed out on a dai!y (asis. Refer to section 19.1
+:. $ /ero-(a!ance account3 $. is used to co er the compensating (a!ance requirement of a !ine of credit agreement. B. is on!y used to deposit funds recei ed at !oca! !oc.(o%es. C. is funded on an as-needed (asis on!y. ". is !imited to hand!ing payro!! dis(ursements. E. requires a compensating (a!ance. Refer to section 19.2
19-26
+<. )hich one of the fo!!o&ing statements is correct concerning /ero-(a!ance accounts* $. Each /ero-(a!ance account is offset (y a compensating (a!ance account. B. Bero-(a!ance accounts are used for depositing incoming funds. C. $ master account must (e used in con?unction &ith a /ero-(a!ance account. ". Bero-(a!ance accounts are used so!e!y in con?unction &ith a !oc.(o% system. E. Bero-(a!ance accounts are sti!! required to maintain a minima! (a!ance. Refer to section 19.2
+9. )hich one of the fo!!o&ing statements is correct* $. 'he money mar.et refers to securities that mature in t&o years or !ess. B. Ban.s are prohi(ited from in esting cash surp!uses on (eha!f of their customers on a shortterm (asis. C. -hort-term securities tend to ha e a high degree of interest rate ris.. D. $ cyc!ica! firm may purchase mar.eta(!e securities as part of its short-term financing p!an. E. Corporations are not permitted to in est in money mar.et mutua! funds (ut can in est in (an. money mar.et accounts. Refer to section 19.5
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#, Section: !"$4 %opic: 1anagement of cash surplus
19-2:
1>. )hich t&o of the fo!!o&ing are the primary reasons &hy firms temporari!y accumu!ate !arge cash surp!uses* 8. cyc!ica! acti ities 88. desire to in est funds 888. dai!y operations 8@. fi%ed asset purchases $. 8 and 888 on!y B. 88 and 8@ on!y C. 8 and 88 on!y ". 888 and 8@ on!y E. 8 and 8@ on!y Refer to section 19.5
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#, Section: !"$4 %opic: 1anagement of cash surplus
11. )hich one of the fo!!o&ing statements is correct* $. Money mar.et accounts are !o&-ris., high-return in estments. B. 'he rate of return earned on short-term securities tends to e%ceed that earned on !ong-term securities. C. C.-. 'reasury (i!!s are &e!! suited for short-term in estments. ". 'he income earned on C.-. 'reasury (i!!s is e%empt from a!! ta%ation. E. -hort-term in estments tend to ha e high !e e!s of defau!t ris.. Refer to section 19.5
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#, Section: !"$4 %opic: Short#term securities
19-2<
1+. Municipa! (onds3 A. are !ess !iquid than C.-. 'reasury (i!!s. B. produce income that is su(?ect to federa! income ta%ation. C. genera!!y pay a higher coupon than corporate (onds. ". are a!so referred to as commercia! paper. E. are issued (y the federa! go ernment. Refer to section 19.5
11. Money mar.et securities ha e &hich of the fo!!o&ing characteristics* 8. !ong maturities 88. !o& defau!t ris. 888. high degree of !iquidity 8@. !o& rates of return $. 8 and 888 on!y B. 88 and 888 on!y C. 8 and 8@ on!y D. 88, 888, and 8@ on!y E. 8, 88, 888, and 8@ Refer to section 19.5
19-29
12. $ ?um(o C"3 $. is issued (y the federa! go ernment. B. genera!!y matures (et&een + and 5 years. C. is a !oan of =1>>,>>> or more to a municipa!ity. ". is a !oan of =1 mi!!ion or more on a short-term (asis. E. is a short-term !oan of =1>>,>>> or more to a commercia! (an.. Refer to section 19.5
15. Bro&n 'ruc.ing is (uying a C.-. 'reasury (i!! today &ith the understanding that the se!!er &i!! (uy it (ac. tomorro& at a s!ight!y higher price. 'his in estment is .no&n as a3 $. commercia! paper transaction. B. repurchase agreement. C. pri ate certificate of deposit. ". re enue anticipation note. E. (i!! anticipation note. Refer to section 19.5
19-5>
16. $ repurchase agreement genera!!y has a ma%imum !ife of3 $. 1 day. B. a fe& days. C. one month. ". one to three months. E. three to si% months. Refer to section 19.5
1:. $ money mar.et preferred stoc.3 A. has a f!oating di idend. B. is so!d on!y under a repurchase agreement. C. is a specia! form of commercia! paper. ". has more price o!ati!ity than an ordinary preferred. E. has its interest rate reset dai!y. Refer to section 19.5
19-51
1<. )hich of the fo!!o&ing costs re!ated to ho!ding cash are minimi/ed &hen the !e e! of cash a firm ho!ds is optimi/ed* $. opportunity costs B. trading costs C. tota! costs ". (oth trading and opportunity costs E. trading costs, opportunity costs, and tota! costs Refer to section 19.$
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#, Section: !"$A %opic: Cash balance
19. )hich of the fo!!o&ing statements re!ated to the B$' mode! is correct* 8. 'he B$' mode! is used to determine the target cash (a!ance for a firm. 88. 'he B$' mode! is rare!y used in (usiness due to its comp!e% nature. 888. 'he B$' mode! is a mode! that he!ps e!iminate a firm4s co!!ection f!oat. 8@. Dne disad antage of the B$' mode! is the fact that it assumes a!! cash outf!o&s are .no&n &ith certainty. $. 8 and 88 on!y B. 888 and 8@ on!y C. 88 and 888 on!y ". 8 and 888 on!y E. 8 and 8@ on!y Refer to section 19.$
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#, Section: !"$A %opic: BA% mo(el
19-5+
2>. )hich of the fo!!o&ing aria(!es are inc!uded in the B$' mode!* 8. upper cash !imit 88. interest rate on mar.eta(!e securities 888. opportunity cost of ho!ding cash 8@. fi%ed cost of each securities trade $. 88 on!y B. 8 and 888 on!y C. 88 and 8@ on!y D. 88, 888, and 8@ on!y E. 8, 888, and 8@ on!y Refer to section 19.$
21. 'he B$' mode! is used to3 $. ma%imi/e the (enefits of !e erage. B. determine the optima! cash position of a firm. C. e!iminate a!! dai!y cash surp!uses. ". ana!y/e the cash (a!ance gi en f!uctuating cash inf!o&s and outf!o&s. E. ma%imi/e the opportunity costs of ho!ding cash. Refer to section 19.$
19-51
2+. 'he Mi!!er-Drr mode! assumes that3 $. the cash (a!ance is dep!eted at regu!ar inter a!s. B. a!! cash f!o&s are .no&n &ith certainty. C. the a erage change in the dai!y cash f!o&s is positi e. ". management &i!! set (oth the !o&er and the upper desired !e e!s of cash. E. the cash (a!ance f!uctuates in a random manner. Refer to section 19.$
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#, Section: !"$A %opic: 1iller#Orr mo(el
21. 'he Mi!!er-Drr mode!3 $. recommends se!!ing securities in an amount equa! to ECF - CG &hen the cash (a!ance reaches L. B. requires that mar.eta(!e securities (e so!d &hene er the cash (a!ance fa!!s (e!o& the target !e e!. C. (ases the optima! !e e! of cash so!e!y on the opportunity costs of ho!ding cash. ". supports the argument that the target cash (a!ance dec!ines as order costs increase. E. ad ocates in esting an amount descri(ed as ECF - CG in mar.eta(!e securities &hen the cash (a!ance reaches CF. Refer to section 19.$
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#, Section: !"$A %opic: 1iller#Orr mo(el
19-52
22. )hich of the fo!!o&ing statements is correct* $. $ firm has a greater !i.e!ihood of needing an une%pected !oan &hen its cash f!o&s are re!ati e!y constant o er time. B. 'he cost of (orro&ing affects the target cash (a!ance of a firm. C. Management4s desire to maintain a !o& cash (a!ance has no effect on the (orro&ing needs of a firm. ". 'he target cash (a!ance increases as the interest rate rises. E. 'he target cash (a!ance decreases as the order costs increase. Refer to section 19.$
AACSB: N/A Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#, Section: !"$A %opic: %arget cash balance
25. 'he 9o((y -hop has a chec.ing account &ith a !edger (a!ance of =69+. 'he firm has =1,>61 in unco!!ected deposits and =<26 in outstanding chec.s. )hat is the amount of the dis(ursement f!oat on this account* $. => B. =+1: C. =<26 ". =9>9 E. =1,>61 "is(ursement f!oat J =<26
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: Disbursement float
19-55
26. Dn an a erage day, 7!astics Enterprises &rites 2+ chec.s &ith an a erage amount of =5<:. 'hese chec.s c!ear the (an. in an a erage of + days. )hat is the a erage amount of the dis(ursement f!oat* $. =1,1:2 B. =5,<>5 C. =+2,652 D. =29,1>< E. =:1,96+ "is(ursement f!oat J 2+ =5<: + J =29,1><
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: Disbursement float
2:. Dn a erage, your firm recei es 6+ chec.s a day from customers. 'hese chec.s, on a erage, are &orth =19.9> each and c!ear the (an. in 1.5 days. 8n addition, your firm dis(urses 1< chec.s a day &ith an a erage amount of =<9.5>. 'hese chec.s c!ear your (an. in + days. )hat is the a erage amount of the co!!ection f!oat* $. =+,2:1.<> B. =1,2>1.>> C. =1,:1>.:> ". =5,1>1.5> E. =6,<>+.>> Co!!ection f!oat J 6+ =19.9> 1.5 J =1,:1>.:>
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: Collection float
19-56
2<. )hen Chris (a!anced her (usiness chec.(oo., she had an ad?usted (an. (a!ance of =11,21<. -he had + outstanding deposits &orth =<:9 each and 11 chec.s outstanding &ith a tota! a!ue of =1,62<. )hat is the amount of the co!!ection f!oat on this account* $. -=1,<9> B. =1,:5< C. =1,62< ". =5,2>6 E. =6,>1+ Co!!ection f!oat J =<:9 + J =1,:5<
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: Collection float
29. Your company has an a ai!a(!e (a!ance of =:,911. $ deposit of =+,2<> that &as made this morning is not yet inc!uded in the (an.4s (a!ance. 'here are a!so 2 chec.s outstanding &ith a a!ue of =1+5 each. )hat is the net f!oat* A. net co!!ection f!oat of =1,1<> B. net co!!ection f!oat of =+,2<> C. net f!oat of =6,:11 ". net dis(ursement f!oat of =1,1>> E. net dis(ursement f!oat of =+,2<> Aet co!!ection f!oat J =+,2<> - E2 =1+5G J =1,1<>
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: Net float
19-5:
5>. $ firm has =16,:1< in outstanding chec.s that ha e not c!eared the (an.. 'he firm a!so has =11,25> in deposits that ha e (een recorded (y the firm (ut not (y the (an.. 'he current a ai!a(!e (a!ance is =11,2>:. )hat is the status of the net f!oat* $. net co!!ection f!oat of =<,11< B. net co!!ection f!oat of =+,>21 C. net co!!ection f!oat of =11,25> D. net dis(ursement f!oat of =1,+6< E. net dis(ursement f!oat of =5,111 Aet dis(ursement f!oat J =16,:1< - =11,25> J =1,+6<
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: Net float
51. Your firm genera!!y recei es 2 chec.s a month. 'he chec. amounts and the co!!ection de!ay for each chec. is sho&n (e!o&. ,i en this information &hat is the amount of the a erage dai!y f!oat* $ssume a 1> day month.
A. =1,>:> B. =+,111 C. =+,62> ". =+,9>> E. =1,216 $ erage dai!y f!oat J KE=1,+>> +G L E=1,9>> 1G L E=5,<>> 1G L E=2,+>> +GM1> J =1,>:>
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: A erage (aily float
19-5<
5+. 9oyes Lum(er genera!!y recei es 1 chec.s a month. 'he chec. amounts and the co!!ection de!ay for each chec. are sho&n (e!o&. ,i en this information, &hat is the amount of the a erage dai!y f!oat* $ssume each month has 1> days.
A. =1,1<6.6: B. =1,2>:.19 C. =2,:5>.>> ". =6,<11.11 E. =6,911.11 $ erage dai!y f!oat J KE=6,1>> 1G L E=5,5>> 1G L E=<,9>> +GNM1> J =1,1<6.6:
19-59
51. 'he B!ue -tar genera!!y recei es on!y 1 chec.s a month. 'he chec. amounts and the co!!ection de!ay for each chec. are sho&n (e!o&. ,i en this information, &hat is the amount of the a erage dai!y f!oat* $ssume e ery month has 1> days.
$. =9:1.21 B. =1,256.6: C. =1,151.11 ". =5,666.6: E. =6,<>>.>> $ erage dai!y f!oat J KE=9,1>> +G L E=+,9>> 1G L E=<,2>> +NM1> J =1,256.6:
AACSB: Analytic Bloom's: &no'le(ge Difficulty: Basic Learning Objecti e: !"#, Section: !"$* %opic: A erage (aily float
19-6>
52. 'he 0ood )ho!esa!er genera!!y recei es 2 chec.s a month. 'he chec. amounts and the co!!ection de!ay for each chec. are sho&n (e!o&. ,i en this information, &hat is the amount of the a erage dai!y f!oat* $ssume e ery month has 1> days.
$. =1,961.<9 B. =+1,:5>.>> C. =++,+16.6: ". =+<,111.11 E. =15,6:5.>> $ erage dai!y f!oat J KE=6:,+>> 1G L E=91,6>> 1G L E=52,+>> +G L E=<<,5>> 1GNM1> J =++,+16.6:
19-61
55. 9ot 'u( Bui!ders se!!s to three retai! out!ets. Each retai!er pays once a month in the amounts sho&n (e!o&. 'he co!!ection de!ay associated &ith each payment is a!so gi en (e!o&. )hat is the amount of the a erage dai!y receipts if you assume each month has 1> days*
$. =+,1<9.:> B. =<,19>.>> C. =12,6><.11 ". =+1,<96.9: E. =<1,9>>.>> E=1<,:>> L =129,<>> L =5:,+>>GM1> J =<,19>
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: A erage (aily receipts
19-6+
56. $t!as Bui!ders dea!s strict!y &ith fi e customers. 'he a erage amount each customer pays per month a!ong &ith the co!!ection de!ay associated &ith each payment is sho&n (e!o&. ,i en this information, &hat is the amount of the a erage dai!y receipts* $ssume e ery month has 1> days.
A. =1,121.11 B. =+,526.6: C. =+,9<1.11 ". =6,166.6: E. =6,<6>.>> $ erage dai!y receipts J E=6,<>> L =<,5>> L =+,>>> L =9,5>> L =:,5>>GM1> J =1,121.11
19-61
5:. Aationa! E%porters dea!s strict!y &ith t&o customers. 'he a erage amount each customer pays per month a!ong &ith the co!!ection de!ay associated &ith each payment is sho&n (e!o&. ,i en this information, &hat is the amount of the a erage dai!y receipts* $ssume that e ery month has 1> days.
$. =+,651.11 B. =1,>>6.11 C. =5,1>6.6: ". =:,<11.6: E. =<,6>>.>> $ erage dai!y receipts J E=<6,2>> L =:+,<>>GM1> J =5,1>6.6:
19-62
5<. Cross Country 'ruc.ing pro ides transportation ser ices e%c!usi e!y for four customers. 'he a erage amount each customer pays per month a!ong &ith the co!!ection de!ay associated &ith each payment is sho&n (e!o&. ,i en this information, &hat is the &eighted a erage de!ay* $ssume each month has 1> days.
$. +.11 days B. +.+: days C. +.26 days ". +.5> days E. +.:< days 'ota! month!y co!!ections J =62,>>> L =<<,+>> L =96,5>> L =2:,9>> J =+96,6>> )eighted a erage de!ay J KE=62,>>>M=+96,6>>G +N L KE=<<,+>>M=+96,6>>G 1N L KE=96,5>>M=+96,6>>G +N L KE=2:,9>>M=+96,6>>G 1N J +.26 days
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: 5eighte( a erage (elay
19-65
59. 9igh Bro& E%press dea!s strict!y &ith t&o customers. 'he a erage amount each customer pays per month a!ong &ith the co!!ection de!ay associated &ith each payment is sho&n (e!o&. ,i en this information, &hat is the &eighted a erage de!ay* $ssume that e ery month has 1> days.
$. 1.:9 days B. 1.<2 days C. +.>> days ". +.>: days E. +.16 days 'ota! month!y co!!ections J =219,>>> L =5:5,>>> J =992,>>> )eighted a erage de!ay J KE=219,>>>M=992,>>>G 1N L KE=5:5,>>>M=992,>>>G 1N J +.16 days
19-66
6>. 'he Meta!!urgica! -pecia!ty Co. dea!s strict!y &ith four customers. 'he a erage amount each customer pays per month a!ong &ith the co!!ection de!ay associated &ith each payment is sho&n (e!o&. ,i en this information, &hat is the &eighted a erage de!ay* $ssume each month has 1> days.
$. 1.9< days B. +.>2 days C. +.>9 days ". +.16 days E. +.+1 days 'ota! month!y co!!ections J =+<:,>>> L =216,>>> L =119,>>> L =+11,>>> J =1,>:5,>>> )eighted a erage de!ay J KE=+<:,>>>M=1,>:5,>>>G 2N L KE=216,>>>M=1,>:5,>>>G 1N L KE=119,>>>M=1,>:5,>>>G 1N L KE=+11,>>>M=1,>:5,>>>G 1N J +.+1 days
19-6:
61. Dn an a erage day, ,oose "o&n 0eathers recei es =+,2>> in chec.s from customers. 'hese chec.s c!ear the (an. in an a erage of 1.: days. 'he app!ica(!e dai!y interest rate is >.>2 percent. )hat is the present a!ue of the f!oat* $ssume each month has 1> days. $. =115.+> B. =61<.2> C. =+,2>>.>> D. =2,><>.>> E. =2,+56.5> 7resent a!ue of the f!oat J =+,2>> 1.: J =2,><>
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: Cost of float
6+. Dn an a erage day, 'o&n Center 9ard&are recei es =+,2+> in chec.s from customers. 'hese chec.s c!ear the (an. in an a erage of +.1 days. 'he app!ica(!e dai!y interest rate is >.>+5 percent. )hat is the ma%imum amount this store shou!d pay to comp!ete!y e!iminate its co!!ection f!oat* $ssume each month has 1> days. $. =1,15+.1< B. =1,+<<.15 C. =+,1>9.16 ". =2,61:.11 E. =5,><+.>> Ma%imum cost J 7resent a!ue of the f!oat J =+,2+> +.1 J =5,><+.>>
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: Cost of float
19-6<
61. Dn an a erage day, your firm recei es =11,<>> in chec.s from customers. 'hese chec.s c!ear the (an. in an a erage of +.1 days. 'he app!ica(!e dai!y interest rate is >.>15 percent. )hat is the highest dai!y fee your firm shou!d pay to comp!ete!y e!iminate the co!!ection f!oat* $ssume each month has 1> days. $. =1.2+ B. =1.:+ C. =1:.:< ". =12.1< E. =1:.+> Ma%imum dai!y fee J =11,<>> +.1 >.>>>15 J =1.:+
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: 1a.imum (aily fee
62. Dn an a erage day, )i!son H )i!son recei es =:,<>> in chec.s from customers. 'hese chec.s c!ear the (an. in an a erage of 1.: days. 'he app!ica(!e dai!y interest rate is >.>++ percent. )hat is the highest dai!y fee this firm shou!d pay to comp!ete!y e!iminate its co!!ection f!oat* $ssume each month has 1> days. $. =1.:+ B. =+.9+ C. =1:.+> ". =+2.1> E. =+9.1: Ma%imum dai!y fee J =:,<>> 1.: >.>>>++ J =+.9+
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#! Section: !"$* %opic: 1a.imum (aily fee
19-69
65. Your a erage customer is !ocated 2.1 mai!ing days a&ay from your firm. You ha e determined that, on a erage, it is ta.ing your staff 1.5 days to process payments recei ed from customers. 8n addition, it ta.es an a erage of +.+ days for your funds to (e a ai!a(!e for use once you ha e made your (an. deposit. )hat is your firm4s co!!ection time* $. +.+ days B. 1.: days C. 2.1 days ". 5.< days E. <.> days Co!!ection time J 2.1 L 1.5 L +.+ J < days
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#* Section: !"$, %opic: Collection time
66. 8t ta.es your firm 2.5 days to prepare and mai! out a!! the month!y statements to your customers. Dn a erage, the mai! time (et&een your firm and your customers is +.6 days. Customer chec.s ta.e an a erage of 1.< days to c!ear the (an.. You ha e determined that your tota! a erage co!!ection time is 6.1 days. 9o& !ong, on a erage, does it ta.e your firm to process the payments from customers* A. 1.: days B. +.6 days C. 2.2 days ". 2.< days E. 6.+ days 7rocessing time J 6.1 - +.6 - 1.< J 1.: days
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#* Section: !"$, %opic: Collection time
19-:>
6:. Current!y, your firm requires + days to process the chec.s &hich customers mai! in to pay for their credit purchases. 'he a erage mai! time associated &ith these payments is +.1 days and the chec. c!earing time is +.1 days. 8f your firm adopts a !oc.(o% system, the mai! time &i!! (e cut in ha!f. 8n addition, if emp!oyees are reassigned, chec.s cou!d (e processed the same day they are recei ed. 9o& !ong &i!! your co!!ection time (e if (oth the !oc.(o% system and the ?o( reassignments are imp!emented* $. 1.<5 days B. 2.1> days C. 2.+5 days ". 2.2> days E. 2.55 days Co!!ection time J E+.1 >.5G L 1 L +.1 J 2.+5 days
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#! Section: !"$, %opic: Collection time
6<. You are considering imp!ementing a !oc.(o% system for your firm. 'he system is e%pected to reduce the a erage co!!ection time (y 1.+ days. Dn an a erage day, your firm recei es 1+> chec.s &ith an a erage a!ue of =99 each. 'he dai!y interest rate on 'reasury (i!!s is >.>12 percent. )hat is the anticipated amount of the dai!y sa ings if this system is imp!emented* $. =+.61 B. =1.+9 C. =2.25 D. =5.1+ E. =5.:< "ai!y sa ings J 1+> =99 1.+ >.>>>12 J =5.1+
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#* Section: !"$, %opic: Loc-bo. (aily sa ings
19-:1
69. Roger4s "istri(utors recei es an a erage of +16 chec.s a day. 'he a erage amount per chec. is =6+9. 'he firm is considering a !oc.(o% system &hich it anticipates &i!! reduce the a erage co!!ection time (y 1.5 days. 'he dai!y interest rate on 'reasury (i!!s is >.>11 percent. )hat is the amount of the e%pected dai!y sa ings of the !oc.(o% system* $. =+.>2 B. =6.9+ C. =12.95 ". =1<.1> E. =++.2+ "ai!y sa ings J +16 =6+9 1.5 >.>>>11 J =++.2+
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#* Section: !"$, %opic: Loc-bo. (aily sa ings
:>. 9and 'oo!s, 8nc. recei es an a erage of 611 chec.s a day. 'he a erage amount per chec. is =2+5. 'he firm is considering a !oc.(o% system &hich it anticipates &i!! reduce the a erage co!!ection time (y 1 day. 'he (an. charges =>.+:5 a chec. for this ser ice. 'he dai!y interest rate on 'reasury (i!!s is >.>11 percent. )hat is the a erage dai!y cost of the !oc.(o% system* $. =11.16 B. =52.19 C. =16<.>1 ". =1<>.11 E. =199.19 "ai!y cost J 611 =>.+:5 J =16<.>1
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#* Section: !"$, %opic: Loc-bo. (aily cost
19-:+
:1. You are considering imp!ementing a !oc.(o% system for your firm. 'he system is e%pected to reduce the a erage co!!ection time (y 1.1 days. Dn an a erage day, your firm recei es 116 chec.s &ith an a erage a!ue of =+19 each. 'he dai!y interest rate on 'reasury (i!!s is >.>+1 percent. 'he (an. charge per chec. is =>.++. )hat is the anticipated dai!y cost of the !oc.(o% system* $. =1.2< B. =6.+5 C. =1+.6> D. =+9.9+ E. =16.1: "ai!y cost J 116 =>.++ J =+9.9+
AACSB: Analytic Bloom's: Application Difficulty: Basic Learning Objecti e: !"#* Section: !"$, %opic: Loc-bo. (aily cost
:+. You are considering imp!ementing a !oc.(o% system for your firm. 'he system is e%pected to reduce the a erage co!!ection time (y +.< days. Dn an a erage day, your firm recei es +,219 chec.s &ith an a erage a!ue of =1,+<: each. 'he dai!y interest rate on 'reasury (i!!s is >.>16 percent. 'he (an. charge per chec. is =>.1>. )hat is the net present a!ue of this !oc.(o% arrangement* $. -=2,515,6+5 B. -=+,611,5:5 C. =1<:,219 D. =2,1<1,2<1 E. =11,+5+,:11 Aet present a!ue J K+,219 =1,+<: +.<N - KE+,219 =>.1>GM.>>>16N J =2,1<1,2<1
AACSB: Analytic Bloom's: Analysis Difficulty: 6nterme(iate Learning Objecti e: !"#* Section: !"$, %opic: Loc-bo. net present alue
19-:1
:1. Rose&e!! 8nternationa! recei es an a erage of +6< chec.s a day &ith an a erage amount per chec. of =<+>. 'he firm is considering a !oc.(o% system &hich it anticipates &i!! reduce the a erage co!!ection time (y 1.2 days. 'he (an. charges =>.+1 a chec. for this ser ice. 'he dai!y interest rate on 'reasury (i!!s is >.>+ percent. )hat is the net present a!ue of this !oc.(o% arrangement* $. -=61,62> B. -=+6,+62, C. =+6,+62 ". =1>,<+> E. =61,62> Aet present a!ue J K+6< =<+> 1.2N - KE+6< =>.+1GM.>>>+N J =+6,+62
AACSB: Analytic Bloom's: Analysis Difficulty: 6nterme(iate Learning Objecti e: !"#* Section: !"$, %opic: Loc-bo. net present alue
19-:2
9+. Each (usiness day, on a erage, a company &rites chec.s tota!ing =+6,>>> to pay its supp!iers. 'he usua! c!earing time for the chec.s is 5 days. Mean&hi!e, the company is recei ing payments from its customers each day, in the form of chec.s, tota!ing =2>,>>>. 'he cash from the payments is a ai!a(!e to the firm after + days. )hat is the amount of the firm4s a erage net f!oat* $. =1>,>> B. =5>,>>> C. =<>,>>> ". =11>,>>> E. =11>,>>> Aet f!oat J 5E=+6,>>>G - +E=2>,>>>G J =5>,>>>
AACSB: Analytic Bloom's: Application Difficulty: Basic 3OC 7: !"#* Learning Objecti e: !"#! Section: !"$* %opic: Net float
91. 7urp!e 0eet )ine, 8nc. recei es an a erage of =6,>>> in chec.s per day. 'he de!ay in c!earing is typica!!y 1 days. 'he current interest rate is >.>+5 percent per day. $ssume 1> days per month. )hat is the highest dai!y fee the company shou!d (e &i!!ing to pay to e!iminate its f!oat entire!y* $. =1.5> B. =1.>> C. =1.:5 D. =2.5> E. =6.>> Ma%imum dai!y fee J E=6,>>> 1G >.>>>+5 J =2.5>
AACSB: Analytic Bloom's: Application Difficulty: Basic 3OC 7: !"#, Learning Objecti e: !"#! Section: !"$* %opic: Cost of float
19-:5
92. Your neigh(or goes to the post office once a month and pic.s up t&o chec.s, one for =1<,>>> and one for =2,>>>. 'he !arger chec. ta.es 2 days to c!ear after it is depositedI the sma!!er one ta.es 6 days. $ssume 1> days per month. )hat is the &eighted a erage de!ay* $. 2.+1 days B. 2.16 days C. 2.:< days ". 5.>> days E. 6.>> days 'ota! month!y receipts J =1<,>>> L =2,>>> J =++,>>> )eighted a erage de!ay J KE=1<,>>>M=++,>>>G 2N L KE=2,>>>M=++,>>>G 6N J 2.16 days
AACSB: Analytic Bloom's: Application Difficulty: Basic 3OC 7: !"#/ Learning Objecti e: !"#! Section: !"$* %opic: 5eighte( a erage (elay
95. Your firm has an a erage receipt si/e of =6>. $ (an. has approached you concerning a !oc.(o% ser ice that &i!! decrease your tota! co!!ection time (y 1 day. You typica!!y recei e +<,>>> chec.s per day. 'he dai!y interest rate is >.>16 percent. )hat is the A7@ of the !oc.(o% pro?ect if the (an. charges a fee of =+1> per day* A. =16:,5>> B. =2+:,5>> C. =9>1,15> ". =1,21+,5>> E. =1,6<>,>>> A7@ of ser ice J =6>E+<,>>>G - E=+1>M>.>>>16G J =16:,5>>
AACSB: Analytic Bloom's: Application Difficulty: Basic 3OC 7: !"#4 Learning Objecti e: !"#* Section: !"$, %opic: Loc-bo. N)8
19-:6
96. $ mai!-order firm processes 5,>>> chec.s per month. Df these, 55 percent are for =55 and 25 percent are for =65. 'he =55 chec.s are de!ayed + days on a erageI the =65 chec.s are de!ayed 5 days on a erage. $ssume each month has 1> days. 'he interest rate is 6 percent per year. 9o& much shou!d the firm (e &i!!ing to pay to reduce the &eighted a erage f!oat (y 1.2 days* $. =2,165 B. =11,<<1 C. =21,65> ". =11<,<<1 E. =216,5>> Ma%imum payment J $ erage dai!y f!oat J 1.2OKE>.55 5,>>> =55G L E>.25 5,>>> =65GNM1>P J =11,<<1
AACSB: Analytic Bloom's: Application Difficulty: Basic 3OC 7: !"#9 Learning Objecti e: !"#! Section: !"$* %opic: A erage (aily float
19-::
9:. 7aper -u(marine Manufacturing is in estigating a !oc.(o% system to reduce its co!!ection time. 8t has determined the fo!!o&ing3
'he tota! co!!ection time &i!! (e reduced (y + days if the !oc.(o% system is adopted. )hat is the A7@ of adopting the !oc.(o% system* $. =6>>,>>> B. =::5,>>> C. =9:5,>>> ". =1,+>>,>>> E. =1,2+5,>>> A7@ J E+ 1>> =2,>>>G - KE=>.65 1>>GM>.>>>+N J =1,2+5,>>>
AACSB: Analytic Bloom's: Application Difficulty: Basic 3OC 7: !"#: Learning Objecti e: !"#* Section: !"$, %opic: Loc-bo. N)8
19-:<
9<. 9ome Roasted 'ur.eys dis(urses chec.s e ery 2 &ee.s that a erage =:>,>>> and ta.e 5 days to c!ear. 9o& much interest can the company earn if it de!ays transfer of funds from an interest-(earing account that pays >.>+ percent per day for these 5 days* 8gnore the effects of compound interest. $ssume 5+ &ee.s in a year. $. =16 B. =91 C. =1<+ ". =162 E. =91> 8nterest J =:>,>>> E5G E5+M2G E>.>>>+G J =91>
AACSB: Analytic Bloom's: Application Difficulty: Basic 3OC 7: !"#" Learning Objecti e: !"#* Section: !"$, %opic: 8alue of (elay
99. Ae er $gain Enterprises has an agreement &ith 'he )orth Ban. &here(y the (an. hand!es =1.1+ mi!!ion in co!!ections a day and requires a =1,>>>,>>> compensating (a!ance. Ae er $gain is contemp!ating cance!ing the agreement and di iding its eastern region so that t&o other (an.s &i!! hand!e its (usiness. Ban.s $ and B &i!! each hand!e =1.56 mi!!ion of co!!ections a day, and each requires a compensating (a!ance of =1,55>,>>>. Ae er $gain4s financia! management e%pects that co!!ections &i!! (e acce!erated (y one day if the eastern region is di ided. 'he '-(i!! rate is 5 percent annua!!y. )hat is the amount of the annua! net sa ings if this p!an is adopted* $. =1>,+>> B. =51,>>> C. =:6,5>> ". =1>+,>>> E. =1+5,>>> A7@ J =1,1+>,>>> - K+E=1,55>,>>>G - =1,>>>,>>>N J =1,>+>,>>> Aet sa ings J >.>5E=1,>+>,>>>G J =51,>>>
AACSB: Analytic Bloom's: Application Difficulty: Basic 3OC 7: !"#!; Learning Objecti e: !"#* Section: !"$, %opic: N)8 of float re(uction
19-:9
1>>. Mountaintop 8nns, a #entuc.y company, has determined that a ma?ority of its customers are !ocated in the 7ennsy! ania area. 8t therefore is considering using a !oc.(o% system offered (y a (an. !ocated in 7itts(urgh, 7ennsy! ania. 'he (an. has estimated that use of the system &i!! reduce co!!ection time (y one day. 8n addition to the aria(!e charge sho&n (e!o&, there is a!so a fi%ed charge of =2,1+> per year for the !oc.(o% system. $ssume a year has 165 days. )hat is the A7@ of the !oc.(o% system gi en the fo!!o&ing information*
$. -=156,:+: B. -=111,1>1 C. -=:2,+>< ". =11,5>: E. =+6,211 A7@ J E1 :5> =1,<>>G - KE=>.1> :5>GME1.>61M165 - 1GN - K=2,1+>M>.>6N J -=111,1>1
AACSB: Analytic Bloom's: Analysis Difficulty: 6nterme(iate 3OC 7: !"#!! Learning Objecti e: !"#* Section: !"$, %opic: Loc-bo. N)8
19-<>
1>1. Co& Chips, 8nc., a !arge ferti!i/er distri(utor (ased in Ca!ifornia, is p!anning to use a !oc.(o% system to speed up co!!ections from its customers !ocated on the East Coast. $ 7hi!ade!phia-area (an. &i!! pro ide this ser ice for an annua! fee of =+5,>>> p!us 1> cents per transaction. 'he estimated reduction in co!!ection and processing time is one day. 'he a erage customer payment in this region is =<,+>>. 'reasury (i!!s are current!y yie!ding 5 percent per year. $ssume a year has 165 days. $ppro%imate!y ho& many customers each day, on a erage, are needed to ma.e the system profita(!e for Co& Chips, 8nc.* $. 56 B. 6: C. :2 ". <1 E. <9 A7@ J > J E=<,+>> 1 AG - E=>.1> AGM>.>>>112 - =+5,>>>M>.>5 A J 6: customers per day
AACSB: Analytic Bloom's: Analysis Difficulty: 6nterme(iate 3OC 7: !"#!* Learning Objecti e: !"#* Section: !"$, %opic: %ransactions re2uire(
19-<1

Chap 019

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Chap 019

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Chapter 19 - Cash and Liquidity Management

Chapter 19 Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

$. =1,>:> B. =+,111 C. =+,62> ". =+,9>> E. =1,216

$. =1,1<6.6: B. =1,2>:.19 C. =2,:5>.>> ". =6,<11.11 E. =6,911.11

Chapter 19 - Cash and Liquidity Management

$. =9:1.21 B. =1,256.6: C. =1,151.11 ". =5,666.6: E. =6,<>>.>>

$. =1,961.<9 B. =+1,:5>.>> C. =++,+16.6: ". =+<,111.11 E. =15,6:5.>>

Chapter 19 - Cash and Liquidity Management

$. =+,1<9.:> B. =<,19>.>> C. =12,6><.11 ". =+1,<96.9: E. =<1,9>>.>>

$. =1,121.11 B. =+,526.6: C. =+,9<1.11 ". =6,166.6: E. =6,<6>.>>

Chapter 19 - Cash and Liquidity Management

$. =+,651.11 B. =1,>>6.11 C. =5,1>6.6: ". =:,<11.6: E. =<,6>>.>>

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

$. -=156,:+: B. -=111,1>1 C. -=:2,+>< ". =11,5>: E. =+6,211

Chapter 19 - Cash and Liquidity Management

Chapter 19 Cash and Liquidity Management $ns&er #ey

Multiple Choice Questions

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management

Chapter 19 - Cash and Liquidity Management