1. Which of the following represents a precautionary need for cash? o You need Tk.2,000 because...

 

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1. Which of the following represents a precautionary need for cash? o You need Tk.2,000 because you have to pay monthly utility bills 0 You need Tk.2,000 because you want to hang out with your friends and eat out O You need Tk. 2,000 because you may find something of your choice at a clothing shop which is offering its merchandise on sale for only days o You need Tk.2,000 because you may have to spend high on transportation cost because of a countrywide public transportation strike 2.Rahima Fabric's current cash conversion cycle is 30 days. It is thinking of extending its days sales outstanding by 4 days and payables deferral period by 3 days. Rahima's current cost of labour and materials is Tk.40. Rahima's working capital financing can be expected to 0 O O o Decrease by Tk. 120 Increase by Tk.40 Increase by Tk.160 Decrease by Tk.40 3. You have decided to send a sum of money using wire transfer which transferred the money immediately and cost Tk.50. You could transfer the money using depository transfer cheque which would cost you only Tk.8 and would take 4 days to reach its destination bank. The opportunity cost at the destination bank is 14 percent per year. The amount of money that you have transferred is 0 Tk.27,000 o Tk.26,000 o Tk.28,000 o Tk.26,500 4.In a relaxed working capital investment policy, the firm is O Optimistic that its targeted sales will be achieved with large investment in current assets o Optimistic that it can achieve its targeted sales without maintaining large amount of current assets Optimistic that the economic condition is favourable for achieving targeted sales o o Optimistic that at its current level of working capital, its returns will be high 5.A credit term where the customer is required to pay within 40 days of sales but is eligible for a 3% discount for paying with 15 days of sales may termed 3/40, n 15 3/15, n 40 O O o 2/10, n 30 02/15, n 55 6.If the annual demand for an inventory item is 25,000 units, relevant ordering cost per order is Tk.210 and the carrying cost of one unit is Tk.25, then the economic order quantity is 658 unite 7.The shorter the cash conversion cycle O 0 O O 8. The NextStar Company has sales of Tk 45 million, variable cost of goods sold of Tk.36 million, a days sales outstanding of 25 days. NextStar finances its accounts receivable with a 12 percent line of credit. NextStar's receivables carrying cost is o Tk.450,000 o Tk. 300,000 Tk.375,000 Tk.468,750 The more moderate the working capital investment policy The more relaxed the working capital investment policy o 9.Under conditions of uncertainty, the firm can increase its sales by all of the following, EXCEPT o Offering extra quantity for free o Offering lower discount period o Offering higher credit period o Offering higher discount rate O O O O The more restricted the working capital investment policy The more is the need for working capital financing 10.In the context of setting credit standard, capacity refers to the customer's ability to generate sufficient sales and cash flow to repay it credit purchases. the customer's ability to put up adequate security with the seller against its credit purchases. the customer's ability to maintain sufficient liquidity and profitability to repay its credit purchases. the customer's ability attract large number of buyers to sell it credit purchases. o O 0 O 11.Rainbow Company generally receives delivery of inventory within 5 days of placing orders. However, recently the supplier has been taking around three days longer to deliver the item. Rainbow's annual requirement for the inventory is 40,320 units. What is Rainbow's safety stock for the inventory item? O 0 O 330 units 336 units 560 units 896 units. 12.Retro Company has Cash of Tk.100,000. Its sales are Tk.6,000,000 of which, 87 percent is cost of goods sold and 43 percent is accounts receivable. Assuming a 360 day year, the average number of days that Retro takes to collect its outstanding sales is 364 days 155 days 187 days 313 days 1. Which of the following represents a precautionary need for cash? o You need Tk.2,000 because you have to pay monthly utility bills 0 You need Tk.2,000 because you want to hang out with your friends and eat out O You need Tk. 2,000 because you may find something of your choice at a clothing shop which is offering its merchandise on sale for only days o You need Tk.2,000 because you may have to spend high on transportation cost because of a countrywide public transportation strike 2.Rahima Fabric's current cash conversion cycle is 30 days. It is thinking of extending its days sales outstanding by 4 days and payables deferral period by 3 days. Rahima's current cost of labour and materials is Tk.40. Rahima's working capital financing can be expected to 0 O O o Decrease by Tk. 120 Increase by Tk.40 Increase by Tk.160 Decrease by Tk.40 3. You have decided to send a sum of money using wire transfer which transferred the money immediately and cost Tk.50. You could transfer the money using depository transfer cheque which would cost you only Tk.8 and would take 4 days to reach its destination bank. The opportunity cost at the destination bank is 14 percent per year. The amount of money that you have transferred is 0 Tk.27,000 o Tk.26,000 o Tk.28,000 o Tk.26,500 4.In a relaxed working capital investment policy, the firm is O Optimistic that its targeted sales will be achieved with large investment in current assets o Optimistic that it can achieve its targeted sales without maintaining large amount of current assets Optimistic that the economic condition is favourable for achieving targeted sales o o Optimistic that at its current level of working capital, its returns will be high 5.A credit term where the customer is required to pay within 40 days of sales but is eligible for a 3% discount for paying with 15 days of sales may termed 3/40, n 15 3/15, n 40 O O o 2/10, n 30 02/15, n 55 6.If the annual demand for an inventory item is 25,000 units, relevant ordering cost per order is Tk.210 and the carrying cost of one unit is Tk.25, then the economic order quantity is 658 unite 7.The shorter the cash conversion cycle O 0 O O 8. The NextStar Company has sales of Tk 45 million, variable cost of goods sold of Tk.36 million, a days sales outstanding of 25 days. NextStar finances its accounts receivable with a 12 percent line of credit. NextStar's receivables carrying cost is o Tk.450,000 o Tk. 300,000 Tk.375,000 Tk.468,750 The more moderate the working capital investment policy The more relaxed the working capital investment policy o 9.Under conditions of uncertainty, the firm can increase its sales by all of the following, EXCEPT o Offering extra quantity for free o Offering lower discount period o Offering higher credit period o Offering higher discount rate O O O O The more restricted the working capital investment policy The more is the need for working capital financing 10.In the context of setting credit standard, capacity refers to the customer's ability to generate sufficient sales and cash flow to repay it credit purchases. the customer's ability to put up adequate security with the seller against its credit purchases. the customer's ability to maintain sufficient liquidity and profitability to repay its credit purchases. the customer's ability attract large number of buyers to sell it credit purchases. o O 0 O 11.Rainbow Company generally receives delivery of inventory within 5 days of placing orders. However, recently the supplier has been taking around three days longer to deliver the item. Rainbow's annual requirement for the inventory is 40,320 units. What is Rainbow's safety stock for the inventory item? O 0 O 330 units 336 units 560 units 896 units. 12.Retro Company has Cash of Tk.100,000. Its sales are Tk.6,000,000 of which, 87 percent is cost of goods sold and 43 percent is accounts receivable. Assuming a 360 day year, the average number of days that Retro takes to collect its outstanding sales is 364 days 155 days 187 days 313 days

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The detailed answer for the above question is provided below 1The more restricted the working capital investment policy is the more of a need for cash there is This is because a more restricted policy ... View the full answer