This quiz works best with JavaScript enabled. Home > Corporate Finance > Working Capital Management – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Working Capital Management Quiz 10 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is Cash Cost of Production in Q.1 of test: A) 26, 25, 000. B) 25, 62, 000. C) 26, 52, 000. D) None of these. Show Answer Correct Answer: B) 25, 62, 000. 2. Working capital management is concerned with managing: A) Long-term investments. B) Short-term assets and liabilities. C) Equity financing. D) Capital budgeting. Show Answer Correct Answer: B) Short-term assets and liabilities. 3. Money market financial services not include: A) Bill Discounting. B) Merchant Banking. C) Leasing. D) Securitization. Show Answer Correct Answer: B) Merchant Banking. 4. If credit sales are £52, 000 a week and the average accounts receivable balance is £200, 000, calculate the average settlement period for accounts receivable? A) 27 days. B) 74 days. C) 117 days. D) 140 days. Show Answer Correct Answer: A) 27 days. 5. A merchant will need working capital if: A) Intends to buy a new machine to increase its production capacity. B) The business premises need to be renovated/expanded to accommodate the increasing inventory of merchandise. C) Requires an increase in merchandise inventory due to increasing sales turnover, sales receivables. D) All the statements above are true. Show Answer Correct Answer: C) Requires an increase in merchandise inventory due to increasing sales turnover, sales receivables. 6. What is Economic Order Quantity? A) Cost of an Order. B) Reorder level. C) Cost of Stock. D) Optimum order size. E) Not aware of. Show Answer Correct Answer: D) Optimum order size. 7. A company's working capital is negative. What does this indicate? A) The company is in financial trouble. B) The company is very profitable. C) The company has a strong liquidity position. D) The company's assets are undervalued. Show Answer Correct Answer: A) The company is in financial trouble. 8. Permanent working capital are ..... A) Varies with seasonal need. B) Includes fixed assets. C) In the amount of current assets required to meet a firm long term minimum needs?. D) Includes accounts payable. Show Answer Correct Answer: C) In the amount of current assets required to meet a firm long term minimum needs?. 9. In Current Ratio, Current Assets are compared with: A) Fixed Assets. B) Current Profit. C) Current Liabilities. D) Equity Share Capital. Show Answer Correct Answer: C) Current Liabilities. 10. The following is the limitations of EOQ MODEL A) Demand may very through out the year. B) It assumes that the shortage space is unlimited. C) Prices of material change through out the year. D) All of the above. Show Answer Correct Answer: D) All of the above. 11. What is Cost of Raw material consumed A) 17, 82, 000. B) 17, 28, 000. C) 5, 58, 000. D) None of these. Show Answer Correct Answer: B) 17, 28, 000. 12. Which among the following is a quantity of a specific item that is ordered from the supplier and issued as a standard quantity to the production process? A) Safety stock. B) Lot size. C) Standard deviations. D) Inventory control. Show Answer Correct Answer: B) Lot size. 13. In ABC analysis system the B catagory stands for ..... A) Outstanding importance in value. B) Comparatively unimportant in values. C) Comparatively important in values. D) Average importance in values. Show Answer Correct Answer: D) Average importance in values. 14. The period from the acquisition of raw materials to the collection of accounts receivable is known as: A) Cash conversion cycle. B) Operating cycle. C) Inventory turnover period. D) Debt collection period. Show Answer Correct Answer: B) Operating cycle. 15. Under which type of bank borrowing can a borrower obtain credit from a bank against its bills A) Letter of credit. B) Cash. C) Purchase or discounting of billls. D) Working capital loan. Show Answer Correct Answer: C) Purchase or discounting of billls. 16. The basic objective of tandon committee recommendation is dead the dependence of industry on when should gradually A) Increase. B) Decrease. C) Remain stable. D) None of above. Show Answer Correct Answer: D) None of above. 17. Emergency Working Capital is..... A) Working capital caused by seasonal fluctuations. B) The amount of working capital changes as a result of conjunctural fluctuations. C) Working capital that changes due to unexpected events. D) The minimum working capital that a company must have to maintain or continue its life. E) Working capital required by a company to support the company's normal operations. Show Answer Correct Answer: C) Working capital that changes due to unexpected events. 18. Which of the following is not a standard methods of inventory valuation A) Fifo. B) Standard cost. C) Average pricing. D) Realizable value. Show Answer Correct Answer: C) Average pricing. 19. What is value of net working capital in Q.1 of test A) 30, 56, 750. B) 30, 65, 750. C) 30, 56, 570. D) None of these. Show Answer Correct Answer: A) 30, 56, 750. 20. Which of the following is a technique that helps the exporter to sell the receivable to any bank or financial institutions without recourse? A) Forfeiting. B) Leading and lagging. C) Derivatives. D) Netting. Show Answer Correct Answer: A) Forfeiting. ← PreviousNext →Related QuizzesWorking Capital Management Quiz 1Working Capital Management Quiz 2Working Capital Management Quiz 3Working Capital Management Quiz 4Working Capital Management Quiz 5Working Capital Management Quiz 6Working Capital Management Quiz 7Working Capital Management Quiz 8Working Capital Management Quiz 9Working Capital Management Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books