Long Term Securities Paper 2

1

Garner Products is considering a new accounts payable and cash disbursement process, which is projected to add 3 days to the disbursement schedule without having significant negative effects on supplier relations. Daily cash outflows average $1,500,000. Garner is in a short-term borrowing position for 8 months of the year and in an investment position for 4 months. On an annual basis, bank lending rates are expected to average 7% and marketable securities yields are expected to average 4%. What is the maximum annual expense that Garner could incur for this new process and still break even?






2

Which of the following investments generally pay the highest return?






3

Which one of the following is not a characteristic of a negotiable certificate of deposit? Negotiable certificates of deposit






4

Which of the following statements is correct when comparing bond-financing alternatives?






5

Which of the following are characteristics of Euro bonds?






6

At the inception of an operating lease how should the leased asset be accounted for on the lessee financial statements?






7

Capital and operating leases differ in that the lessee






8

Which of the following is an advantage of debt financing?






9

All of the following are advantages of debt financing except






10

If an investor is concerned about interest rate risk, the investor should consider investing in






Result

Total Questions:
Correct Answers:
Wrong Answers:
Percentage: