Financed with current liabilities


Question 1. If you invest $750 every six months at 8% compounded semi-annually, how much would you accumulate at the end of 10 years?

a.    $10,065
b.    $10,193
c.    $22,334
d.    $21,731

Question 2. The focus of current asset management is on:

a.    property, plant, and equipment acquisition.
b.    cash, accounts receivable, and inventory levels.
c.    investments in marketable securities.
d.    both a and c.
e.    all of the above.

Question 3. With regard to the hedging principle, which of the following assets should be financed with current liabilities?

a. Minimum level of cash required for year-round operations
b. Expansion of accounts receivable to meet seasonal demands
c. Machinery used to produce a firm's inventory
d. Both a and b
e. Both b and c

Question 4. If you place $50 in a savings account with an interest rate of 7% compounded weekly, what will the investment be worth at the end of five years (round to the nearest dollar)?

a. $72
b. $70
c. $71
d. $57

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Finance Basics: Financed with current liabilities
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