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long-term debt

Question

Issuing additional long-term debt of $5 million and buying new long-term assets worth $4 million and short-term 

assets of $1 million will result in a net cash flow of _____ and a change in net working capital of ____. $5 million; $1 million $0; $5 million $0; $1 million $5 million; $0

 
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firm’s credit policy

Question

In general, a firm’s credit policy should grant credit whenever the expected:loss from default is less than

the cost of the product. profit from granting credit exceeds the profit from refusing. profit exceeds the price of the product. probability of a loss is less than 50%.

 
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inventory carrying cost

Question

Which one of the following is not an inventory carrying cost?Insurance expense for the inventory Opportunity

cost of capital for inventory investment Cost of inventory Cost of shelf space

 
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The financial manager of a firm

Question

The financial manager of a firm does not maintain a ledger balance but refers to the bank balance as it appears

online to determine the amount of funds in the firm’s checking account. What is the financial manager ignoring? Bank fees Direct deposits Float Customer checks returned for insufficient funds

 
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