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Fundamentals of Corporate Finance Study Set 23

Business

Quiz 19 :

Behavioural Finance

Quiz 19 :

Behavioural Finance

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Check kiting is:
Free
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Answer:

D

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The cash found in a cash drawer that a check-out clerk uses to make change is an example of which of the following motives for holding cash?
Free
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Answer:

E

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Disbursements float:
Free
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Answer:

E

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A lockbox system:
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A lockbox is a:
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Which of the following will reduce collection time? I.billing customers electronically rather than by mail II.accepting debit cards but not checks as payment for a sale III.offering cash discounts for early payment IV.reducing the processing delay by one day
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Yesterday, the president of RB Enterprises received a phone call from DLK, a competitor.DLK is a sole proprietorship.An unexpected family situation has caused the owner to suddenly want to retire and relocate closer to his family.Thus, the assets of DLK are being offered to RB Enterprises at a bargain basement price.While RB Enterprises had not anticipated purchasing these assets, it was decided that the opportunity was too good to pass up.This illustrates which of the following needs to hold cash?
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The Presque Isle Center has branch operations in three states.Each branch deals with a local bank.However, all excess funds in these branch bank accounts are transferred on a daily basis to the firm's primary bank located near the firm's home office.This routine of transferring cash to the primary bank on a regular basis is referred to as:
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An account into which a firm transfers funds, usually from a master account, in an amount sufficient to cover the checks presented for payment that day is called a _____ account.
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An account into which funds are deposited only in an amount equal to the value of the checks presented for payment that day is called a _____ account.
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GT Motors regularly issues short-term debt to finance its daily operations.Suddenly, the credit markets froze and no funds were available for borrowing.Fortunately, the firm had some cash reserves saved that it was able to use to fund its operations until additional credit was available.The need to retain cash for situations such as this is referred to as which one of the following motives for holding cash?
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Float is defined as the:
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Adjustment costs is another name for which one of the following?
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Why do firms need liquidity? I.to meet compensating balance requirements II.to take advantage of an opportunity that suddenly arises III.to conduct daily business activities IV.to be prepared for a financial emergency
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Which of the following should help reduce the total collection time for a firm? I.opening a post office box so mail can be received earlier in the morning II.assigning additional staff in the morning to process incoming payments III.providing a discount for customers who pay electronically IV.establishing preauthorized payments from customers
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Which one of the following collection times is correctly described?
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Which one of the following statements is correct?
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The Snow Hut has analyzed the carrying and shortage costs associated with its cash holdings and determined that the firm should ideally maintain a cash balance of $3,600.This $3,600 represents which one of the following to the firm?
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Collection float:
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Cash management primarily involves:
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