Chapter 10: Short Term Finance: Working Capital

7 Questions | Total Attempts: 25

SettingsSettingsSettings
Please wait...
Chapter 10: Short Term Finance: Working Capital

.


Questions and Answers
  • 1. 
    Working capital is defined as the funds invested in:
    • A. 

      Non-current assets

    • B. 

                      inventory

    • C. 

      Receivables

    • D. 

      Current assets

  • 2. 
    Which of the following is not classified as permanent funding?
    • A. 

      Commercial bills

    • B. 

      Long-term debt

    • C. 

      Leases

    • D. 

                      Ordinary shares.

  • 3. 
    Floor-plan finance is most likely to be used by:
    • A. 

      A supermarket

    • B. 

      A real estate agent

    • C. 

      A retailer of motor vehicles

    • D. 

      A firm of public accountants

  • 4. 
    Which of the following is not a source of informal short-term finance?
    • A. 

      Accrued wages

    • B. 

      Superannuation and taxes

    • C. 

      Factoring

    • D. 

      Trade credit

  • 5. 
    A commercial bill with a face value of $50 000 has a current price of $49291. This bill is trading at a yield of 7.5% which necessarily implies a time to maturity of:
    • A. 

      70 days

    • B. 

      80 days

    • C. 

      90 days

    • D. 

      100 days.

  • 6. 
    A promissory note with a face value of $500 000 has 45 days until maturity. If the relevant yield is 7% then the current price of this promissory note is:
    • A. 

      $495 722

    • B. 

      $498 722

    • C. 

      $495 120

    • D. 

      $495 788.

  • 7. 
    A commercial bill with a face value of $100 000 has a current price of $97 711. This bill has 95 days to maturity which necessarily implies that its yield is:
    • A. 

      8%

    • B. 

      9%

    • C. 

      10%

    • D. 

      11%.

Back to Top Back to top