hitechpathshala

Q. 1

The credit terms may be expressed as “3/15 net 60”. This means that a 3% discount will be granted if the customer pays within 15 days, if he does not avail the offer, he must make payment within 60 days.

I agree with the statement

I do not agree with the statement

I cannot say.

Q. 2

The term ‘net 50’ implies that the customer will make payment:

Exactly on 50th day

Before 50th day

Not later than 50th day

None of the above.

Q. 3

Trade credit is a source of :

Long-term finance

Medium term finance

Spontaneous source of finance

None of the above

Q. 4

The term float is used in:

Inventory Management

Receivable Management

Cash Management

Marketable securities.

Q. 5

William J Baumol’s model of Cash Management determines optimum cash level where the carrying cost and transaction cost are:

Maximum

Minimum

Medium

none of the above

Q. 6

In Miller – ORR Model of Cash Management:

The lower, upper limit, and return point of Cash Balances are set out

Only upper limit and return point are decided

Only lower limit and return point are decided

None of the above are decided.

Q. 7

Working Capital is defined as:

Excess of current assets over current liabilities

Excess of current liabilities over current assets

Excess of Fixed Assets over long-term liabilities

None of the above.

Q. 8

Working Capital is also known as “Circulating Capital, fluctuating Capital and revolving capital”. The aforesaid statement is;

Correct

Incorrect

Cannot say

None of the above

Q. 9

The basic objectives of Working Capital Management are:

Optimum utilization of resources for profitability

To meet day-to-day current obligations

Ensuring marginal return on current assets is always more than cost of capital

Select any one of the above statements.

Q. 10

The term Gross Working Capital is known as:

The investment in current liabilities

The investment in long-term liability

The investment in current assets

none of the above

WORKING CAPITAL

Marks: 10