Ideally, which of the following type of assets should be financed with long-term financing?
a.Fixed assets and permanent current assets
b.Temporary and permanent current assets
c.Fixed assets only
d.Fixed assets and temporary current assets

A "normal" term structure of interest rates would depict
a.no general relationship between short- and long-term rates.
b.medium rates (1-5 years) lower than both short-term and long-term.
c.short-term rates higher than long-term rates.
d.long-term rates higher than short-term rates.

The term structure of interest rates
a.shows the relative interest spread between bonds with different risk ratings such as AAA, AA, A, BBB, etc.
b.depicts interest rates for T-bills over the last year.
c.changes daily reflect current competitive conditions in the money and capital markets.
d.plots returns for securities of different risk.

Frisch Fish Corp expects net income next year to be %600,000. Inventory and accounts receivable will have to be increased by %300,000 to accommodate this sales level. Frisch will pay dividends of $400,000. How much external financing will Frisch Fish need assuming no organically generated increase in liabilities.
a.$200,000
b.$300,000
c.No external financing is required.
d.$100,000

One of the first considerations in cash management is
a.profitability
b.to put any excess cash into accounts receivable.
c.to have as much cash as possible on hand.
d.synchronization of cash inflows and cash outflows.

Which of the following is not a method of speeding up collections?
a.extended disbursement float.
b.all of these are methods for speeding up collections.
c.Lock-box system
d.regional collection centers.

The problem in stretching out the maturity of marketable securities is that
a.there is greater possibility of loss.
b.interest rates are generally lower.
c.you are legally locked in until the maturity date.
d.long-term rates higher than short-term rates.

We expect that we can receive annual incremental income after taxes of $15,000 which includes an adjustment for uncollectible accounts. What is the maximum required after-tax return is 12%?
a.$168,000
b.$180,000
c.$18,000
d.$125,000