Question

18.A company has annual credit sales of $27m and related cost of sales of $15m. The company has the following targets for the next year: Trade receivables days: 50 days Inventory days: 60 days Trade payables: 45 days Assume there are 360 days in the year. What is the net investment in working capital required for the next year? a. $8,125,000 b. $4,375,000 c. $2,875,000 d. $6,375,000 19. Pop Co is switching from using mainly long-term fixed rate finance to fund its working capital to using mainly short-term variable rate finance. Which of the following statements about the change in Pop Co's working capital financing policy is true? a. Finance costs will increase b. Refinancing risk will increase c. Interest rate risk will decrease d. Overcapitalisation risk will decrease 20. Shares having no face value are known as ______ a no-par stock. b. at par stock. c. equal stock. d. debt-equity stock

          18.A company has annual credit sales of $27m and related cost of sales of $15m.
The company has the following targets for the next year:
Trade receivables days:
50 days
Inventory days:
60 days
Trade payables:
45 days
Assume there are 360 days in the year.
What is the net investment in working capital required for the next year?
a.  $8,125,000
b.  $4,375,000
c.  $2,875,000
d.  $6,375,000
19.
Pop Co is switching from using mainly long-term fixed rate finance to fund its
working capital to using mainly short-term variable rate finance. Which of the following
statements about the change in Pop Co's working capital financing policy is true?
a.  Finance costs will increase
b.  Refinancing risk will increase
c.  Interest rate risk will decrease
d.  Overcapitalisation risk will decrease
20. Shares having no face value are known as ______
a no-par stock.
b. at par stock.
c. equal stock.
d. debt-equity stock

18.A company has annual credit sales of 27m and related cost of sales of15m.
The company has the following targets for the next year:
Trade receivables days:
50 days
Inventory days:
60 days
Trade payables:
45 days
Assume there are 360 days in the year.
What is the net investment in working capital required for the next year?
a. 8,125,000
b.4,375,000
c. 2,875,000
d.6,375,000
19.
Pop Co is switching from using mainly long-term fixed rate finance to fund its
working capital to using mainly short-term variable rate finance. Which of the following
statements about the change in Pop Co's working capital financing policy is true?
a. Finance costs will increase
b. Refinancing risk will increase
c. Interest rate risk will decrease
d. Overcapitalisation risk will decrease
20. Shares having no face value are known as
a no-par stock.
b. at par stock.
c. equal stock.
d. debt-equity stock

Added by Jeffery B.

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