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NEW QUESTION: 1
As a company becomes more conservative with respect to working capital policy, it would tend to have a
(n):
A. Increase in the ratio of current assets to noncurrent assets.
B. Decrease in the quick ratio.
C. Increase in the ratio of current liabilities to noncurrent liabilities.
D. Decrease in the operating cycle.
Answer: A
Explanation:
RULE: Working capital policy is deemed to be more conservative as an increasing portion of an
organization's long-term assets, permanent current assets, and temporary current assets are funded by
long-term financing.
Choice "d" is correct. An increase in the ratio of current assets to non-current assets would be indicative
of an increasingly conservative working capital policy. With no other information, an increase in current
assets would indicate that a growing percentage of current assets are financed by non current liabilities
and that, nominally, the absolute amount of working capital and the current ratio is improving.
Choice "a" is incorrect. An increase in the ratio of current liabilities to noncurrent liabilities would indicate
that an increasing portion of our assets are funded by current liabilities, a more aggressive approach to
working capital management.
Choice "b" is incorrect. A decrease in the operating cycle implies that the time to convert inventory into
sales (receivables) and receivables into cash has decreased. Assuming no change in liabilities or sales, a
decreased operating cycle infers declining current asset balances, greater funding of assets by current
liabilities and a more aggressive rather than conservative working capital policy.
Choice "c" is incorrect. A decrease in the quick ratio would indicate that either temporary current assets
are decreasing (and are therefore increasingly funded by current liabilities, indicating a more aggressive
working capital policy) or that current liabilities are increasing, signaling a decrease in the amount of
noncurrent liabilities used to fund temporary current assets, a sign of an increasingly aggressive working
capital policy.
NEW QUESTION: 2
The Model Code stipulates that you have a right to qualify your quotes in terms of amounts:
A. once you have discovered the name of the counterparty for credit reasons
B. if you do so when you make the price
C. at anytime
D. provided the amounts are marketable
Answer: B
NEW QUESTION: 3
In the initial stage of the project life cycle, the project's technical objectives are apt to be understood only in a general sense. A major component of project conflict during this stage of the project is______________
A. Concerns about technical issues
B. Concerns over priorities and procedures
C. Confusion of establishing a project in the matrix management environment
D. Schedules
Answer: C
Explanation:
During project formation, there is always an element of confusion or lack of clarity regarding the balance of power between the project manager and functional managers. If not resolved, such confusion manifests itself in conflicts regarding technical decisions, resource allocation, and scheduling later in the project. [Executing] Meredith and Mantel 2012, 151-152
NEW QUESTION: 4
Which HP B-series SAN Switch feature enables the direct connection of servers to any SAN fabric?
A. Server Application Optimization
B. Access Gateway
C. Extended Fabric
D. Adaptive Networking
Answer: B
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