FIN 650 GC WEEK 6 EXAM 2 LATEST

Assets required per dollar of sales.
A forecasting approach in which the forecasted percentage of sales for each item is held constant.
Funds that a firm must raise externally through short-term or long-term borrowing and/or by selling new
common or preferred stock.
Funds that arise out of normal business operations from its suppliers, employees, and the government,
and they include immediate increases in accounts payable, accrued wages, and accrued taxes.
The amount of cash raised in a given year minus the amount of cash needed to finance the additional
capital expenditures and working capital needed to support the firm’s growth.
Question 25. Mark’s Manufacturing’s average age of accounts receivable is 45 days, the average age of
accounts payable is 40 days, and the average age of inventory is 69 days. Assuming a 365-day year,
what is the length of its cash conversion cycle?
63 days
67 days
70 days
74 days
78 days
Question 26. The Besnier Company had $250 million of sales last year, and it had $75 million of fixed
assets that were being operated at 80% of capacity. In millions, how large could sales have been if the
company had operated at full capacity?
$312.5
$328.1
$344.5
$361.8
$379.8
Question 27. Which of the following statements is NOT CORRECT?
The corporate valuation model discounts free cash flows by the required return on equity.