1. Which of the following would not be counted as part of working capital? a. accounts payable. b. accounts r?

2. Collection float is the amount of time that elapses between ________ a check in an account and the check鈥檚 ______, at which point the funds are actually placed in the account.


a. depositing, clearing


b. issuing, clearing


c. writing, being deposited


d. receiving, being deposited


e. a and b above





4. Sarah鈥檚 Computer City sells 5,000 boxes of CD-RW compact discs per year. She determined that she pays $50 to process an order for discs. Her purchase price is $6 for each box of discs and she has determined that storage costs for one year are 25 percent. What is her approximate total ordering cost? (HINT: Use EOQ + some arithmetic)


a. $865.


b. $611.


c. $433.


d. $87.


e. $43.





5. If a fast food restaurant has hamburger patties on a serving tray at the cash register, these would be classified as _____________ inventory.


a. finished goods


b. maintenance, repair, and operating


c. raw materials


d. work in process





7. Trade discounts are provided to our firm


a. because we trade with the vendor.


b. because we are smart enough to calculate the discount and take advantage of it.


c. because we provided specific services for our vendor as specified by the vendor.


d. because we provided specific services for our vendor as specified by us.





8. Sam鈥檚 Discount Appliance Company just received a shipment of 30 washing machines. The invoice list price for each washing machine is $365. The manufacturer鈥檚 catalogue indicates that Sam can take the following discounts: 30/15/10 with 30 percent being the normal mark up, 15 percent for free delivery and hook up, and 10 percent for local advertising and point-of-sale displays. If Sam does not advertise this brand of washer and charges $50 for delivery and set up, he will pay the vendor ______ for each washing machine.


a. $255.50


b. $229.95


c. $219.00


d. $217.18





9. Sam鈥檚 Discount Appliance Company just received a shipment of 30 washing machines. The invoice list price for each washing machine is $365. The manufacturer鈥檚 catalogue indicates that Sam can take the following discounts: 30/15/10 with 30 percent being the normal mark up, 15 percent for free delivery and hook up, and 10 percent for local advertising and point-of-sale displays. If Sam performs all services required by the vendor, his net cost rate factor will be


a. 45.00%.


b. 46.45%.


c. 53.55%.


d. 55.00%.





10. The approximate time that it takes a deposit to double at a certain interest rate is calculated by dividing the annual interest rate into the number


a. 36.


b. 48.


c. 72.


d. 100.





11. How much will you pay for a $10,000 Treasury bill at 5.45% discount for 91 days?


a. $135.88


b. $9,863.75


c. $9,864.12


d. $10, 135.88





12. If you purchase an automobile for $20,000 in 2004 and inflation is 4 percent, how much would a similar automobile sell for four years from then? To solve this problem you would use the formula for the


a. future value of a lump sum.


b. present value of a lump sum.


c. future value of an ordinary annuity.


d. future value of an annuity due.


e. present value of an ordinary annuity.





13. You have to make a balloon payment on your house five years from now of $15,000. If money can earn a average of 6 percent a year for the five year period, how much interest will you earn on your deposit in five years? (B2:PVFLS + math)


a. $3,790.50.


b. $3,807.00.


c. $5,073.00.


d. $5,101.50.





14. If inflation averages 6 percent per year, what is the loss of purchasing power for a dollar ten years from now? (B2:PVFLS)


a. 47 cents.


b. 44 cents.


c. 31 cents.


d. no loss.





15. Your employer gives you a stock bonus of $1,000 in your company at the beginning of each year. You plan to retire in 20 years. The stock has a growth rate of 15 percent per annum. What will the value of your stock be in 20 years? (B4:FVAD)


a. $117,810.10.


b. $102,443.60.


c. $86,4421.00.


d. $72,035.10.


e. Cannot determine with the information provided.





16. You have an absolutely brilliant child who is six years old and will be attending a private college in twelve years. You know that in twelve years a four year college will cost at least $70,000 per year (total $280,000) including tuition, books, room, and board. If you can earn 12 percent on a mutual fund investment during the next twelve years, how much will you have to invest at the beginning of each year to have enough to send your child to college for four years?(B4:FVAD;solve for annuity)


a. $11,602.30.


b. $10,359.20.


c. $4,484.33.


d. $5,022.45.|||I'll make this simple. Working Capital means, money you actually have in billed assets (working capital). Accounts Payable is money you're paying out.


Account Receivables is money you are receiving from your (clients, customers or venders) "billed assets"=Working Capital.