FI361 Final

which one of the following terms refers to the termination of a firm as going concern?

Liquidation

Lauries Ice rink keeps an extra $1,000 in case of an emergency. Which type of motive for holding cash does this represent?

precautionary

Chapter 11 Bankruptcy

reorganization

which one of the following is the equity risk arising from the daily operations of a firm?

Business risk

which of these is a use of cash

decreasing accounts payable

float is defined as the difference between the

ledger balance and the available balance

Chapter 7 Bankruptcy

liquidation

Financial risk

Capital structure

Business risk

Daily operations

the cash cycle is equal to the

Operating cycle - AP period

Ted is trying to decide what cost of capital he should assign to a project. Which one of the following should be his primary consideration in this decision?

Risk level of the project

which of these is a speculative motive for holding cash?

buying extra inventory because a key supplier offered a special one-time discount

Lester lent money to The Corner Store by purchasing bonds issued by the store. The rate of return that he and the other lenders require is referred to as the:

cost of debt

Operating cycle

inventory period + accounts receivable period