1.Compensation to banks is always required in providing loans and services to clients. true or false
2. If receivables are high, the firm has a liberal credit policy that results in a high level of accounts receivable.true or false
3. Du Pont equation demonstrates how working capital management affects the return on total assets. true or false
4. A bank makes money by lending out funds that have been taken from the government and from the banks profit. true or false
5. Banks always require borrowers to hold their transactions deposits at the bank. (F) true or false
6. If the credit terms are stated as 2/10, net 30, then buyers may deduct 2% of the purchase price if payment is made within 30 day . true or false
7. Non-operating current assets consist of any other current assets, principally short-term securities in excess of what is required in operations, funds held in case a good merger opportunity arises, cash from the sale of a stock or bond issue before the funds can be invested in fixed assets, or funds held in case the firm loses a lawsuit and is required to compensate the winning party. Our focus in this section is strictly on operating current assets. true or false
8. The goals of inventory management are to ensure that the inventories needed to sustain operations are available, but to hold the costs of ordering and carrying inventories to the lowest possible level. true or false
9. Operating cycle is the process where all firms follow a working capital cycle in which they purchase or produce inventory, hold it for a time, and then sell it and receive cash. true or false
10. Operating current assets are necessary to operate the business. true or false
