Reference no: EM132899820

Problem 1: Which of the following actions should Paperang Inc. take if it wants to reduce its cash conversion cycle?

Option 1: Increase average inventory without increasing sales.

Option 2: Sell an issue of long-term bonds and use the proceeds to buy back some of its common stock.

Option 3: Take steps to reduce the DSO.

Option 4: Start paying its bills sooner, which would reduce the average accounts payable but not affect sales.

Option 5: Sell common stock to retire long-term bonds.

Problem 2: Net working capital is the difference between

Option 1: Fixed assets and current liabilities

Option 2: Current assets and current liabilities

Option 3: Total assets and total liabilities

Option 4: Shareholder's equity and cash

Problem 3: Which of the following actions would not be consistent with good management?

Option 1: Maintaining an average cash balance equal to that required as a compensating balance or that which minimizes total cost.

Option 2: Use of checks and drafts in disbursing funds.

Option 3: Minimize the use of float

Option 4: Increased synchronization of cash flows.