Which of the following changes in a firms working capital management is most likely to result in a shorter operating cycle?
A. Reducing stock-outs by carrying greater quantities of inventory.
B. Stretching its payables by paying on the last permitted date.
Changing its credit terms for customers from 2/10,net 60 to 2/10,net 30.
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Which of the following would most likely be considered a negative factor in assessing the suitability of a board member? The board member:
A. Has served for ten years.
B. Has served on other boards.
C. Is a former CEO of another firm.
Jay Company has a debt-to-equity ratio of 2.0. Jay is evaluating the cost of equity for a project in the same line of business as Cass Company and will use the pure-play method with Cass as the compar
A. Will be less than Jay Companys beta.
B. Will be greater than Jay Companys beta.
Could be greater than or less than Jay Companys beta.
Chapmin Corp. is a large domestic services firm with a good credit rating. The source of short-term financing it would most likely use is:
A. Factoring of receivables.
B. Issuing commercial paper.
C. Issuing bankers acceptances.
The use of secondary sources of liquidity would most likely be considered:
A normal part of daily business for a company.
B. A signal that a companys financial position is deteriorating.
C. A lower-cost source of short-term financing compared to primary sources of liquidity.