Deciding to extend credit to customer is working capital

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Reference no: EM132071489

1. Deciding to extend credit to a customer is a working capital decision.

True

False

2. Today, you earn a salary of $75,500. What was your annual salary be five years ago if you receive annual raises of 3.6%?

a. $62,230

b. $62,844

c. $58,213

d. $63,263

e. $63,441

3. A firm currently has sales of $500,000, a 6% profit margin and a 40% dividend payout ratio. What is the anticipated amount of dividends to be paid to shareholders if sales are expected to increase by 10%?

a. $13,100

b. $13,860

c. $12,600

d. $13,200

e. $12,000

4. A decrease in a firm's capital intensity ratio implies an increase in how efficiently it uses its assets to generate sales.

True

False

5. One year ago, you invested $5,050. Today, your investment is worth $6,100. What rate of interest did you earn?

a. 16.2%

b. 24.0%

c. 23.5%

d. 22.0%

e. 20.8%

Reference no: EM132071489

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