A lockbox arrangement is:

Answers:	A. a method for the safe-keeping of marketable securities.
	B. used to identify inventory safety stocks.
	C. a system for slowing down cash disbursements.
	D. a system for speeding up a firm's collections of checks received.
	E. a system for speeding up a firm's disbursement of checks to the customers.

• Question 18

A change in the credit policy will be beneficial to a firm if it results in an increase in the:

Selected Answer:	C. net present value.
Answers:	A. days sales outstanding.
	B. bad debt loss.
	C. net present value.
	D. fixed costs.
	E. variable costs.

• Question 19

The process of determining whether the forecast meets the firm's financial targets is known as _____.

Selected Answer:	D. financial statement analysis
Answers:	A. operating breakeven analysis
	B. economies of scale
	C. leverage analysis
	D. financial statement analysis
	E. strategic planning

• Question 20

The cash conversion cycle refers to the:

Selected Answer:	C. length of time from the payment for the purchase of raw materials to manufacture a product until the collection of accounts receivable associated with the sale of the product.
Answers:	A. time taken to convert all long-term assets to cash.
	B. average length of time between the purchase of raw materials and labor and the payment of cash for them.
	C. length of time from the payment for the purchase of raw materials to manufacture a product until the collection of accounts receivable associated with the sale of the product.
	D. amount of time a product remains in inventory in various stages of completion.
	E. time it takes to collect cash following a sale.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below A lockbox arrangement is D a system for speeding up a firms collections of checks receive... View the full answer