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BUS 320 Chapter 6- T/F

T/F Working capital management is relatively unimportant for a small business
False
T/F Liquidating current assets are really fixed assets since they have lives greater than one year
False
T/F One of the primary benefits of implementing supply chain management is a reduction in inventory on hand
True
T/F The Cash budget combines the cash receipts and cash payment schedules in determining cash flows
True
T/F Ideally, permanent current assets should be financed exclusively with short term borrowings
False
T/F Increased use of long term financing is generally a more conservative approach to current asset financing
True
T/F A “risky” financial plan will use long-term financing for fixed assets, permanent current assets and a portion of temporary current assets
False
T/F The “term structure of interest rates” depicts the competetive cost of funds for the various short-term sources of funds such as treasury bills, commercial paper and bank CD’s
False
T/F It is not necessary to understand interest rate movement when deciding the structure of short-term debt relative to long term debt
False
T/F According to the expectations hypothesis, when long-term interest rates are higher than short-term interest rates, long-term rates are expected to decline
False
T/F During tight money periods, short term financing may be difficult to find
True
T/F Long-term financing is usually less expensive than short-term financing because it is not advantageous to the corporation as short-term financing
False
T/F The three most important factors when selecting a financing plan are risk, asset liquidity, and timing
true

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