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Multiple choice questions / T or F regarding working capital

Please state why you choose the selction so I can better understand the question.

1. Which of the following ratios does not measure working capital?

a. quick ratio
b. current ratio
c. current-assets-to-total-assets ratio
d. current-assets-to-sales ratio

2. Which of the following best illustrates the importance of a working capital strategy?

a. monthly effects, resources of the firm, financial reporting, and ability to adjust fixed assets

b. daily effects, resources of the firm, pro forma financial statements, and ability to adjust all assets

c. weekly effects, resources of the firm, financial reporting, and ability to adjust current assets

d. daily effects, resources of the firm, financial reporting, and ability to adjust current assets

3. Companies with a conservative working capital strategy have which of the following characteristics:

a. cash balances are at a minimum

b. receivables are relatively low

c. inventories that are generous to reduce the possibility of a stock out

d. current asset levels are balanced

4. The rate of return on an investment project assuming that future cash flows are invested at the cost of capital instead of the internal rate of return is called the modified internal rate of return.

True

False

5. The relationship between inflation rates and the time of maturity of debt is called the yield curve.

True

False

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Posting ID: 41385 How to Respond to Problems?
Business, Finance Year 4 5 multiple choice questions and or T or F regarding working capital Please state why you choose the selction so I can better understand the question. No files attached.
Bid Credits: 3 Deadline: May 28, 2005, 9:17 pm EDT

1. Which of the following ratios does not measure working capital?
a. quick ratio
b. current ratio
c. current-assets-to-total-assets ratio
d. current-assets-to-sales ratio

b) current ratio = Current asset / current liability
working capital = Current asset - current liability

2. Which of the following best illustrates the ...

$2.19