1. The process of determining whether the forecast meets the firm's financial targets is known as _____.
a. operating breakeven analysis
b. leverage analysis
c. strategic planning
d. economies of scale
e. financial statement analysis
2. A document specifying the terms and conditions of a loan, including the amount, interest rate, and repayment schedule is called a(n):
a. unsecured note.
b. trade credit note.
c. factoring agreement.
d. promissory note.
e. commercial paper agreement.
3. The inventory conversion period of a firm is equivalent to the average age of its inventory.
True
False
4. The following information relates to Gear Corporation.
Inventory conversion period 68.2 days
Receivables collection period 35.8 days
Payables deferral period 24.6 days
The cash conversion cycle of the company is:
a. 60.4 days.
b. 128.6 days.
c. 79.4 days.
d. 57.0 days.
e. 79.2 days.