Quiz Ch 20 – T/F Credit Purchases as Supplier Loans
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: When a firm makes purchases on credit, it is essentially taking a loan from its supplier.
True or false: When a firm makes purchases on credit, it is essentially taking a loan from its supplier.
True or false: Electronic transfer methods such as CHIPS or Fedwire are commonly utilized for substantial business payments.
True or false: The ratio of inventory to daily cost of goods sold can be used to estimate a firm’s inventory period.
True or false: The incremental costs should be carefully considered against the potential benefits of additional credit analysis.
True or false: Unprocessed mailed checks create float.
True or false: Interest-rate risk is elevated in short-term securities.
True or false: The majority of money market instruments exhibit a high level of liquidity.
True or false: Lock-box systems facilitate local banks in collecting and processing the firm’s regional remittances.
True or false: The goal of just-in-time inventory management is to decrease inventory levels.
True or false: Increasing the number of inventory orders per year results in a decrease in total order costs.