Posted: January 2nd, 2017

A firm has an average age of inventory of 60 days, an average collection period of 45 days, and an average payment period of 30 days. The firm’s cash conversion cycle is ________ days.

Question 8.8. Cash flows that could be realized from the best alternative use of an owned asset are called ________. (Points : 2.5) incremental costs lost resale opportunities opportunity costs sunk costs Question 9.9. The clientele effect refers to ________. (Points : 2.5) the relevance of dividend policy on a firm’s share value a firm’s ability to attract stockholders whose dividend preferences are similar to the firm’s dividend policy the informational content of dividends that helps in predicting the future earnings and growth of a firm the “bird-in-the-hand” argument Question 10.10.An increase in fixed operating costs will result in ________.(Points : 2.5) a decrease in the degree of operating leverage an increase in the degree of operating leverage a decrease in the degree of financial leverage an increase in the degree of financial leverage Question 11.11. A firm has an average age of inventory of 60 days, an average collection period of 45 days, and an average payment period of 30 days. The firm’s cash conversion cycle is ________ days. (Points : 2.5) 15 45 75 135 Question 12.12. What is the NPV for a project whose cost of capital is 15 percent and initial after-tax cost is $5,000,000 and is expected to provide after-tax operating cash inflows of $1,800,000 in year 1, $1,900,000 in year 2, $1,700,000 in year 3, and $1,300,000 in year 4? (Points : 2.5) $1,700,000 $371,764 -$137,053 -$4,862,947