Chapter 18 Short-Term Finance and Planning

New shares = (6,000)(4/1)
New shares = 24,000 shares

New value = $24(1/4)(24,000)
New value = $144,000
123) A
Original number of shares = $55,000/$.50
Original number of shares = 110,000 shares

New number of shares = 110,000(3/2)
New number of shares = 165,000
124) B
New price = $31(1/1.10)
New price = $28.18
125) D
New price = $38(1/1.22)
New price = $31.15
126) B
New price = $479,000/[12,000(1.15)]
New price = $34.71


Student name:
1) Road Kill Restaurant had the following account balances. The change in these accounts
represents a net of cash for the year in the amount of .

Beginning Ending Balance
Balance
Accounts receivable $ 26,775 $ 24,560
Accounts payable 39,305 40,690
Inventory 19,045 22,930
1)

, A) Use; $285
B) Source; $3,055
C) Use; 4,715
D) Source; $285
E) Source; $4,715



Question Details
Difficulty : 1 Basic
Topic : Sources and uses of cash
Learning Objective : 18-01 Describe the operating and cash cycles and why they are important.
Section : 18.1 Tracing Cash and Net Working Capital
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Bloom's : Understand




2) A company has an inventory period of 26.3 days, an accounts payable period of 41.9
days, and an accounts receivable period of 34.1 days. What is the company's operating cycle?
2)


A) 60.4 days
B) 34.1 days
C) 49.7 days
D) 102.3 days
E) 18.5 days



Question Details
Difficulty : 1 Basic
Learning Objective : 18-01 Describe the operating and cash cycles and why they are important.
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Bloom's : Understand
Topic : Operating and cash cycles
Section : 18.2 The Operating Cycle and the Cash Cycle

,3) Ives Corporation has an inventory period of 23.8 days, an accounts payable period of
44.9 days, and an accounts receivable period of 35.6 days. What is the company's cash cycle?
3)


A) 59.4 days
B) 104.3 days
C) 33.1 days
D) 14.5 days
E) 56.7 days



Question Details
Difficulty : 1 Basic
Learning Objective : 18-01 Describe the operating and cash cycles and why they are important.
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Bloom's : Understand
Topic : Operating and cash cycles
Section : 18.2 The Operating Cycle and the Cash Cycle




4) You are researching a company and find that it has an inventory period of 22.5 days, an
accounts payable period of 37.1 days, and an accounts receivable period of 31.7 days. The
company's operating cycle is days and its cash cycle is days.
4)


A) 17.1; 54.2
B) 46.3; 68.8
C) 59.6; 27.9
D) 54.2; 17.1
E) 27.9; 59.6

, Question Details
Difficulty : 1 Basic
Learning Objective : 18-01 Describe the operating and cash cycles and why they are important.
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Bloom's : Understand
Topic : Operating and cash cycles
Section : 18.2 The Operating Cycle and the Cash Cycle




5) Stoney Brooke, Incorporated, has sales of $1,000,000 and cost of goods sold of $734,700.
The firm had a beginning inventory of $39,000 and an ending inventory of $54,000. What is the
length of the inventory period? Assume 365 days per year.
5)


A) 16.97 days
B) 19.38 days
C) 23.10 days
D) 19.11 days
E) 22.78 days



Question Details
Difficulty : 1 Basic
Learning Objective : 18-01 Describe the operating and cash cycles and why they are important.
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Bloom's : Understand
Topic : Operating and cash cycles
Section : 18.2 The Operating Cycle and the Cash Cycle




6) On average, your firm sells $31,600 of items on credit each day. The average inventory
period is 19 days and your operating cycle is 40 days. What is the average accounts receivable
balance?
6)