Make your own free website on

Working Capital Management

Multiple Choice
Working Capital Management
Financial Ratio Analysis Heading
Specific Strategies
Exciting Examinations
Multiple Choice
True or False
Essay Questions
Virtual Calculator

Enter subhead content here

Working Capital Management
Multiple Choice

1 .       Which of the following are advantages of commercial paper? [Hint]

  Large minimum balance requirements
  Lower interest rates than bank loans
  Multiple sources for short-term financing
  All of the above

2 .       Which of the following are examples of unsecured short-term credit provided by commercial banks? [Hint]

  Line of credit
  Revolving credit
  Transaction Loans
  All of the above

3 .       Which of the following types of loans (that most people associate with bank credit) is obtained by signing a promissory note and is made for a specific purpose? [Hint]

  Line of credit
  Transaction loan
  Revolving credit
  Commercial paper

4 .       A short-term promise to pay that is sold in the market for short-term debt securities is called: [Hint]

  Line of credit
  Transaction loan
  Revolving credit
  Commercial paper

5 .       Calculate the effective rate of passing up a 3/10 net 60 discount. Use 360 days in your calculations. [Hint]


6 .       Which of the following are disadvantages of current liabilities or short-term debt? [Hint]

  Short-term debt must be repaid or rolled over more often.
  Fluctuation or uncertainty of interest costs.
  Both A and B are disadvantages of short-term debt.
  None of the above

7 .       Calculate the interest payment on a 3-month loan for $1000 at 6% interest. [Hint]


8 .       What is the APR for a $1000 note held for 9 months which carried a $60 interest payment? [Hint]


9 .       The interest rate that considers the effect of compounding is called: [Hint]

  Annual Percentage rate
  Annual Percentage yield
  Interest Expense
  None of the above

10 .       The loan type that involves the pledge of specific assets as collateral in the event of default is called: [Hint]

  Permanent Loan
  Unsecured Loan
  Secured Loan
  None of the above

have a great time in answering our exciting examinatiions... 

If you have same comments and suggestion e-mail us at: