Q&A Hero

Q: The purpose of the Truth in Lending Act of 1968 is to require lenders to quote: a. home mortgage finance charges in a standardized manner. b. rates on all certificates of deposit in a standardized manner. c. payments with and without credit life insurance. d. consumer loan finance charges in a standardized manner. e. finance charges on loans over $100,000 in a standardized manner.

Q: A bank customer is granted credit for a $2,000 loan at 10% to be repaid in 12 equal installments. If the loan quoted has an add-on rate, what are the net proceeds of the loan?a. $2,200b. $2,100c. $2,000d. $1.800e. Cannot be determined

Q: A bank customer is granted credit for a $2,000 loan at 10% to be repaid in 12 equal installments. If the loan quoted has an add-on rate, what is the approximate annual percentage rate (APR) on the loan?a. 20%b. 18%c. 14%d. 12%e. 10%

Q: A bank customer is granted credit for a $2,000 loan at 10% to be repaid in 12 equal installments. If the loan is a discount loan, what is the monthly payment?a. $200.00b. $192.35c. $184.20d. $173.12e. $166.67

Q: A bank customer is granted credit for a $2,000 loan at 10% to be repaid in 12 equal installments. If the loan is a discount loan, what are the net proceeds of the loan?a. $2,200b. $2,100c. $2,000d. $1,800e. Cannot be determined

Q: Under the Equal Credit Opportunity Act, for which of the following is it illegal for a bank to discriminate against borrowers?a. The applicant's incomeb. The applicant's credit historyc. The applicant's national origind. The applicant's job historye. A civil judgement against the applicant

Q: During 2007 — 2008, many borrowers had ________ in their homes causing individuals to "walk away" from their homes. a. positive equity b. negative equity c. positive market value d. negative market value e. positive asset value

Q: The lowest rating category for a subprime loan is: a. A b. B c. C d. D e. E

Q: Which of the following is an example of a non-installment loan? a. Credit card b. 30-year mortgage c. Bridge loan d. 5-year auto loan e. Home equity line of credit

Q: Which of the following are lenders prohibited from asking on a credit application? a. The applicant's income b. If the applicant has a telephone c. If the applicant has declared bankruptcy in the past d. How long the applicant has been on the job e. Lenders are not prohibited from asking any of the above

Q: The Tax Reform Act of 1986 made home equity loans more appealing by: a. eliminating the tax deduction of interest on consumer loans not secured by real estate. b. allowing banks to lend up to 125% of the equity in a home. c. preventing homes from being liquidated in Chapter 13 bankruptcy cases. d. reducing bank income taxes on mortgage loan income. e. all of the above.

Q: Revolving credit may take the form of: a. overdraft protection. b. demand deposit accounts. c. excess reserves. d. automobile loans. e. interchange credit.

Q: The vast majority of credit card revenues comes from: a. merchant discounts. b. net credit gains. c. advertising revenue. d. interest income and annual fees. e. interchange fees.

Q: According to the Federal Reserve, a non-card bank: a. issues its own card. b. does not issue its own card. c. operates under a regional card bank. d. a. and c. e. b. and c.

Q: Credit card issuers earn income from: a. annual fees. b. interest on outstanding balances. c. discounting the charges that merchants accept on purchases. d. All of the above. e. a. and b. only

Q: Which of the following contains a computer memory chip? a. Debit card b. Credit card c. Smart card d. Pre-Paid card e. ATM card

Q: Which of the following is a disadvantage of using a debit card? a. The consumer is charged higher finance charges than on a credit card. b. The consumer loses float. c. They have higher processing costs than ATMs. d. They have lower processing costs than checks. e. They are not widely available.

Q: Which of the following is an example of an indirect loan? a. An automobile dealer negotiates the loan terms with the individual and then presents the agreement to the bank. The bank then makes the loan. b. An automobile dealer refers a customer to the local credit union. The customer goes to the credit union and gets an auto loan secured by the customer's certificates of deposit. c. A homebuyer gets a mortgage over the Internet. d. A student gets a student loan guaranteed by Sallie Mae. e. None of the above.

Q: Which of the following had the greatest net interest margin in 2008? a. International banks b. Agricultural banks c. Credit card lenders d. Consumer lenders e. Mortgage lenders

Q: Pro forma analysis is a form of sensitivity analysis.

Q: A low days inventory on hand and a high inventory turnover relative to industry norms indicates less efficient inventory management and/or more liquidity.

Q: On the cash-based income statement, depreciation is a source of funds.

Q: Negative cash flow will automatically eliminate the possibility that a bank will loan a firm funds.

Q: Every balance sheet and income statement item must be recognized on a cash-based income statement.

Q: Common size ratio comparisons enable comparisons across firms in the same industry.

Q: A firm generally should not count on collateral as the primary source of payment.

Q: Financial statements that have been audited are guaranteed to be 100% accurate.

Q: A borrower making a changing their accountant could be viewed as a negative signal regarding the borrower's condition.

Q: Many bankers focus on eliminating the error of denying a loan to a customer who ultimately would repay the debt.

Q: Which of the following is NOT a type of credit enhancement?a. Excess cash flowb. Credit derivativesc. Loan guaranteesd. All of the above are a type of credit enhancementse. a. and b. are NOT credit enhancements

Q: In loan participations, the _____ makes the original loan and sells participations. a. lead bank b. interbank c. loan production office d. holding firm e. originate bank

Q: Many banks have changed their business model to a _____________ model. a. originate-to-keep b. originate-to-service c. originate-to-pay d. originate-to-lead e. originate-to-distribute

Q: A firm's borrowing base is: a. based on cash flow from operations. b. a measure of long-term profit potential. c. the amount of the firm's unused credit. d. an estimate of the available collateral on a company's current assets. e. a measure of net fixed assets.

Q: Which of the following would cause a firm's ROE to be high, but its ROA to be low? a. A low gross profit margin but a high net profit margin. b. Financing a relatively large proportion of assets with equity. c. Paying very low interest rates on the firm's debts. d. Leasing a large amount of equipment. e. Financing a relatively large proportion of assets with debt.

Q: Under which category are dividends classified on the statement of cash flows? a. Cash From Investing Activities b. Cash From Operating Activities c. Cash From Financing Activities d. Cash From Profit Activities e. None of the above

Q: At a minimum, cash flow from operations should cover: a. interest on long-term debt. b. dividends plus mandatory principal payments on debt. c. capital expenditures plus dividends. d. the change in marketable securities. e. dividends plus interest.

Q: The change in Net Fixed Assets equals: a. capital expenditures minus depreciation. b. capital expenditures plus depreciation. c. capital expenditures minus cash flow from operations. d. Gross fixed assets minus depreciation. e. Gross fixed assets minus cash purchases.

Q: Income StatementRevenues$320,000,000Less: Cost of Goods Sold$162,000,000Gross Profit$158,000,000Less: Operating Expenses$120,000,000Less: Depreciation$11,000,000Operating Profit$27,000,000Less: Interest Expense$8,500,000Net Profit Before Taxes$18,500,000Less: Taxes$6,290,000Net Income$12,210,000Earnings Available to Common$12,210,000Dividends Paid (60% of EAC)$7,326,000Addition to Retained Earnings$4,884,000Earnings Per Share$6.11Balance SheetAssetsCurrent YearPrior YearChangeCash$1,500,000$3,000,000($1,500,000)Marketable Securities$1,500,000$3,200,000($1,700,000)Accounts Receivable$57,000,000$44,000,000$13,000,000Inventory$106,000,000$99,000,000$7,000,000Pre-Paid Expenses$8,400,000$11,000,000($2,600,000)Total Current Assets$174,400,000$160,200,000$14,200,000Long-Term Assets$148,000,000$154,000,000($6,000,000)Total Assets$322,400,000$314,200,000$8,200,000LiabilitiesCurrent YearPrior YearChangeAccounts Payable$8,716,000$6,400,000$2,316,000Short-Term Debt$102,000,000$105,000,000($3,000,000)Total Current Liabilities$110,716,000$111,400,000($684,000)Long-Term Debt (8%)$115,000,000$111,000,000$4,000,000Total Liabilities$225,716,000$222,400,000$3,316,000Common Stock ($1 Par)$2,000,000$2,000,000$0Paid-In Capital$65,000,000$65,000,000$0Retained Earnings$29,684,000$24,800,000$4,884,000Total Equity$96,684,000$91,800,000$4,884,000Total Liabilities and Equity$322,400,000$314,200,000$8,200,000Next year, sales at Dylan are expected to increase by 10%. Also next year, the dividend payout ratio will not change, while gross profit, operating profit, net income, current assets and current liabilities will be the same percentage of sales as the current year. If the firm issues no new common stock, what will be the addition to retained earnings next year?a. $1,112,000b. $2,746,200c. $3,200,000d. $4,884,000e. $5,372,400

Q: Income StatementRevenues$320,000,000Less: Cost of Goods Sold$162,000,000Gross Profit$158,000,000Less: Operating Expenses$120,000,000Less: Depreciation$11,000,000Operating Profit$27,000,000Less: Interest Expense$8,500,000Net Profit Before Taxes$18,500,000Less: Taxes$6,290,000Net Income$12,210,000Earnings Available to Common$12,210,000Dividends Paid (60% of EAC)$7,326,000Addition to Retained Earnings$4,884,000Earnings Per Share$6.11Balance SheetAssetsCurrent YearPrior YearChangeCash$1,500,000$3,000,000($1,500,000)Marketable Securities$1,500,000$3,200,000($1,700,000)Accounts Receivable$57,000,000$44,000,000$13,000,000Inventory$106,000,000$99,000,000$7,000,000Pre-Paid Expenses$8,400,000$11,000,000($2,600,000)Total Current Assets$174,400,000$160,200,000$14,200,000Long-Term Assets$148,000,000$154,000,000($6,000,000)Total Assets$322,400,000$314,200,000$8,200,000LiabilitiesCurrent YearPrior YearChangeAccounts Payable$8,716,000$6,400,000$2,316,000Short-Term Debt$102,000,000$105,000,000($3,000,000)Total Current Liabilities$110,716,000$111,400,000($684,000)Long-Term Debt (8%)$115,000,000$111,000,000$4,000,000Total Liabilities$225,716,000$222,400,000$3,316,000Common Stock ($1 Par)$2,000,000$2,000,000$0Paid-In Capital$65,000,000$65,000,000$0Retained Earnings$29,684,000$24,800,000$4,884,000Total Equity$96,684,000$91,800,000$4,884,000Total Liabilities and Equity$322,400,000$314,200,000$8,200,000What is Dylan's return on equity for the current year?a. 3.8%b. 5.1%c. 5.4%d. 12.6%e. 13.3%

Q: Income StatementRevenues$320,000,000Less: Cost of Goods Sold$162,000,000Gross Profit$158,000,000Less: Operating Expenses$120,000,000Less: Depreciation$11,000,000Operating Profit$27,000,000Less: Interest Expense$8,500,000Net Profit Before Taxes$18,500,000Less: Taxes$6,290,000Net Income$12,210,000Earnings Available to Common$12,210,000Dividends Paid (60% of EAC)$7,326,000Addition to Retained Earnings$4,884,000Earnings Per Share$6.11Balance SheetAssetsCurrent YearPrior YearChangeCash$1,500,000$3,000,000($1,500,000)Marketable Securities$1,500,000$3,200,000($1,700,000)Accounts Receivable$57,000,000$44,000,000$13,000,000Inventory$106,000,000$99,000,000$7,000,000Pre-Paid Expenses$8,400,000$11,000,000($2,600,000)Total Current Assets$174,400,000$160,200,000$14,200,000Long-Term Assets$148,000,000$154,000,000($6,000,000)Total Assets$322,400,000$314,200,000$8,200,000LiabilitiesCurrent YearPrior YearChangeAccounts Payable$8,716,000$6,400,000$2,316,000Short-Term Debt$102,000,000$105,000,000($3,000,000)Total Current Liabilities$110,716,000$111,400,000($684,000)Long-Term Debt (8%)$115,000,000$111,000,000$4,000,000Total Liabilities$225,716,000$222,400,000$3,316,000Common Stock ($1 Par)$2,000,000$2,000,000$0Paid-In Capital$65,000,000$65,000,000$0Retained Earnings$29,684,000$24,800,000$4,884,000Total Equity$96,684,000$91,800,000$4,884,000Total Liabilities and Equity$322,400,000$314,200,000$8,200,000What is Dylan's equity multiplier for the current year?a. 0.30b. 0.63c. 1.52d. 2.67e. 3.33

Q: Income StatementRevenues$320,000,000Less: Cost of Goods Sold$162,000,000Gross Profit$158,000,000Less: Operating Expenses$120,000,000Less: Depreciation$11,000,000Operating Profit$27,000,000Less: Interest Expense$8,500,000Net Profit Before Taxes$18,500,000Less: Taxes$6,290,000Net Income$12,210,000Earnings Available to Common$12,210,000Dividends Paid (60% of EAC)$7,326,000Addition to Retained Earnings$4,884,000Earnings Per Share$6.11Balance SheetAssetsCurrent YearPrior YearChangeCash$1,500,000$3,000,000($1,500,000)Marketable Securities$1,500,000$3,200,000($1,700,000)Accounts Receivable$57,000,000$44,000,000$13,000,000Inventory$106,000,000$99,000,000$7,000,000Pre-Paid Expenses$8,400,000$11,000,000($2,600,000)Total Current Assets$174,400,000$160,200,000$14,200,000Long-Term Assets$148,000,000$154,000,000($6,000,000)Total Assets$322,400,000$314,200,000$8,200,000LiabilitiesCurrent YearPrior YearChangeAccounts Payable$8,716,000$6,400,000$2,316,000Short-Term Debt$102,000,000$105,000,000($3,000,000)Total Current Liabilities$110,716,000$111,400,000($684,000)Long-Term Debt (8%)$115,000,000$111,000,000$4,000,000Total Liabilities$225,716,000$222,400,000$3,316,000Common Stock ($1 Par)$2,000,000$2,000,000$0Paid-In Capital$65,000,000$65,000,000$0Retained Earnings$29,684,000$24,800,000$4,884,000Total Equity$96,684,000$91,800,000$4,884,000Total Liabilities and Equity$322,400,000$314,200,000$8,200,000What is Dylan's return on assets for the current year?a. 3.8%b. 5.1%c. 5.4%d. 12.6%a. 13.3%

Q: Income StatementRevenues$320,000,000Less: Cost of Goods Sold$162,000,000Gross Profit$158,000,000Less: Operating Expenses$120,000,000Less: Depreciation$11,000,000Operating Profit$27,000,000Less: Interest Expense$8,500,000Net Profit Before Taxes$18,500,000Less: Taxes$6,290,000Net Income$12,210,000Earnings Available to Common$12,210,000Dividends Paid (60% of EAC)$7,326,000Addition to Retained Earnings$4,884,000Earnings Per Share$6.11Balance SheetAssetsCurrent YearPrior YearChangeCash$1,500,000$3,000,000($1,500,000)Marketable Securities$1,500,000$3,200,000($1,700,000)Accounts Receivable$57,000,000$44,000,000$13,000,000Inventory$106,000,000$99,000,000$7,000,000Pre-Paid Expenses$8,400,000$11,000,000($2,600,000)Total Current Assets$174,400,000$160,200,000$14,200,000Long-Term Assets$148,000,000$154,000,000($6,000,000)Total Assets$322,400,000$314,200,000$8,200,000LiabilitiesCurrent YearPrior YearChangeAccounts Payable$8,716,000$6,400,000$2,316,000Short-Term Debt$102,000,000$105,000,000($3,000,000)Total Current Liabilities$110,716,000$111,400,000($684,000)Long-Term Debt (8%)$115,000,000$111,000,000$4,000,000Total Liabilities$225,716,000$222,400,000$3,316,000Common Stock ($1 Par)$2,000,000$2,000,000$0Paid-In Capital$65,000,000$65,000,000$0Retained Earnings$29,684,000$24,800,000$4,884,000Total Equity$96,684,000$91,800,000$4,884,000Total Liabilities and Equity$322,400,000$314,200,000$8,200,000What is Dylan's current ratio for the current year?a. 1.36b. 1.44c. 1.58d. 1.68e. 1.71

Q: Income StatementRevenues$320,000,000Less: Cost of Goods Sold$162,000,000Gross Profit$158,000,000Less: Operating Expenses$120,000,000Less: Depreciation$11,000,000Operating Profit$27,000,000Less: Interest Expense$8,500,000Net Profit Before Taxes$18,500,000Less: Taxes$6,290,000Net Income$12,210,000Earnings Available to Common$12,210,000Dividends Paid (60% of EAC)$7,326,000Addition to Retained Earnings$4,884,000Earnings Per Share$6.11Balance SheetAssetsCurrent YearPrior YearChangeCash$1,500,000$3,000,000($1,500,000)Marketable Securities$1,500,000$3,200,000($1,700,000)Accounts Receivable$57,000,000$44,000,000$13,000,000Inventory$106,000,000$99,000,000$7,000,000Pre-Paid Expenses$8,400,000$11,000,000($2,600,000)Total Current Assets$174,400,000$160,200,000$14,200,000Long-Term Assets$148,000,000$154,000,000($6,000,000)Total Assets$322,400,000$314,200,000$8,200,000LiabilitiesCurrent YearPrior YearChangeAccounts Payable$8,716,000$6,400,000$2,316,000Short-Term Debt$102,000,000$105,000,000($3,000,000)Total Current Liabilities$110,716,000$111,400,000($684,000)Long-Term Debt (8%)$115,000,000$111,000,000$4,000,000Total Liabilities$225,716,000$222,400,000$3,316,000Common Stock ($1 Par)$2,000,000$2,000,000$0Paid-In Capital$65,000,000$65,000,000$0Retained Earnings$29,684,000$24,800,000$4,884,000Total Equity$96,684,000$91,800,000$4,884,000Total Liabilities and Equity$322,400,000$314,200,000$8,200,000What is Dylan's cash flow from operations?a. -$2,874,000b. $8,126,000c. $12,210,000d. $19,126,000e. $23,210,000

Q: Income StatementRevenues$320,000,000Less: Cost of Goods Sold$162,000,000Gross Profit$158,000,000Less: Operating Expenses$120,000,000Less: Depreciation$11,000,000Operating Profit$27,000,000Less: Interest Expense$8,500,000Net Profit Before Taxes$18,500,000Less: Taxes$6,290,000Net Income$12,210,000Earnings Available to Common$12,210,000Dividends Paid (60% of EAC)$7,326,000Addition to Retained Earnings$4,884,000Earnings Per Share$6.11Balance SheetAssetsCurrent YearPrior YearChangeCash$1,500,000$3,000,000($1,500,000)Marketable Securities$1,500,000$3,200,000($1,700,000)Accounts Receivable$57,000,000$44,000,000$13,000,000Inventory$106,000,000$99,000,000$7,000,000Pre-Paid Expenses$8,400,000$11,000,000($2,600,000)Total Current Assets$174,400,000$160,200,000$14,200,000Long-Term Assets$148,000,000$154,000,000($6,000,000)Total Assets$322,400,000$314,200,000$8,200,000LiabilitiesCurrent YearPrior YearChangeAccounts Payable$8,716,000$6,400,000$2,316,000Short-Term Debt$102,000,000$105,000,000($3,000,000)Total Current Liabilities$110,716,000$111,400,000($684,000)Long-Term Debt (8%)$115,000,000$111,000,000$4,000,000Total Liabilities$225,716,000$222,400,000$3,316,000Common Stock ($1 Par)$2,000,000$2,000,000$0Paid-In Capital$65,000,000$65,000,000$0Retained Earnings$29,684,000$24,800,000$4,884,000Total Equity$96,684,000$91,800,000$4,884,000Total Liabilities and Equity$322,400,000$314,200,000$8,200,000What were Dylan's cash receipts during the year?a. $307,000,000b. $320,000,000c. $323,000,000d. $424,000,000e. $482,000,000

Q: Which of the following is not a use of cash?a. A decrease in accounts payableb. An increase in inventoryc. An increase in accounts receivabled. The payment of cash dividendse. An increase in wages payable

Q: All of the following are sources of cash except: a. an increase in long-term debt. b. a decrease in inventory. c. a new equity issue. d. a decrease in notes payable. e. an increase in accounts payable.

Q: Cash flows from a firm's normal business activities are reflected in: a. cash flows from investing. b. cash flows from financing. c. cash flows from operations. d. cash flows from income. e. cash flows from budgeting.

Q: A firm has the following financial statement data: Sales = $2,000, COGS = $800, Operating Expenses = $600, and Taxes = $400. What is the firm's profit margin? a. 10% b. 20% c. 30% d. 40% e. 60%

Q: A firm has the following financial statement data: Sales = $1,000, COGS = $400, Operating Expenses = $200, and Taxes = $200. What is the firm's profit margin? a. 10% b. 20% c. 30% d. 40% e. 60%

Q: Which financial ratio measures a firm's ability to pay current interest and lease payments with current earnings? a. Fixed charge coverage ratio b. Return on equity c. Current ratio d. Inventory turnover e. Debt to total assets ratio

Q: A firm's ability to meet its short-term debt obligations is measured by: a. liquidity ratios. b. market value ratios. c. profitability ratios. d. activity ratios. e. leverage ratios.

Q: A firm's mix of debt and equity is measured by: a. liquidity ratios. b. market value ratios. c. profitability ratios. d. activity ratios. e. leverage ratios.

Q: How efficiently a firm is using its assets is measured by: a. liquidity ratios. b. market value ratios. c. profitability ratios. d. activity ratios. e. leverage ratios.

Q: Common size financial statements convert figures to a common size by: a. dividing balance sheet items by total assets and income statement items by net income. b. dividing balance sheet items by sales and income statement items by net income. c. dividing balance sheet items by total assets and income statement items by sales. d. dividing balance sheet items by sales and income statement items by total assets. e. dividing balance sheet items by total equity and income statement items by sales.

Q: Which of the following is not part of the four-stage process for evaluating the financial aspects of commercial loans? a. An analysis of the firm's management, operations, and industry. b. Performing financial ratio analysis. c. Analyze the firm's cash flow. d. Examining the backgrounds of the sales force. e. Project the borrower's financial condition.

Q: Why is liquidating collateral not a preferred means of loan repayment? a. The bank must manage the repossessed collateral until it is sold. b. Transaction costs on liquidating collateral are often quite high. c. Bankruptcy laws may prevent liquidation to occur in a timely manner. d. All of the above. e. b. and c. only

Q: Which of the following characteristics should collateral have? a. The value of the collateral should not exceed the value of the loan. b. The collateral should be highly liquid. c. The lender must be able to perfect a lien on the collateral. d. a. and b. only. e. b. and c. only.

Q: All of the following are basic sources of cash flows except: a. liquidating assets. b. cash flows from operations. c. issuing new equity. d. liquidating liabilities. e. issuing new debt.

Q: Term loans are generally repaid with funds from: a. investing cash flows. b. issuing new debt. c. reductions in inventory and receivables. d. cash flows from operations. e. redeeming marketable securities.

Q: Short-term working capital loans are generally repaid with funds from: a. investing cash flows. b. issuing new debt. c. reductions in inventory and receivables. d. issuing new equity e. redeeming marketable securities.

Q: Which of the following is not one of the essential issues in evaluating commercial loan requests? a. The structure of the borrower's board of directors. b. The character of the borrower. c. The use of the loan proceeds. d. The source of repayment for the loan. e. The amount the customer needs to borrow.

Q: All of the following would be generally be considered acceptable commercial loan purposes except: a. seasonal cash needs. b. paying off other bank debts. c. purchasing new equipment. d. acquiring another firm. e. expanding plant capacity.

Q: Firms may need cash for all of the following except: a. operating purposes. b. pay taxes. c. pay employee salaries. d. pay overdue suppliers. e. liquidate fixed assets.

Q: All leveraged buyouts (LBOs) are labeled highly leveraged transactions.

Q: Loans that are seasonal in nature should be self-liquidating.

Q: National banks can directly take equity positions in real estate projects.

Q: As more lenders securitize loans, the supply of credit falls.

Q: Real estate lending is popular with bank, in part, due to the growth of the secondary mortgage market.

Q: The primary focus of a values driven bank is on the bank's annual profit plan.

Q: The Internet has led to larger spreads for more standardized loan products.

Q: The quality of bank loans varies with the business cycle.

Q: The largest banks have, on average, reduced their dependence on loans relative to smaller banks.

Q: The most prominent risk banks assume in making loans is interest rate risk.

Q: Venture capital financing that comes in the "later rounds" of financing may take the form of: a. start-up capital loans. b. mezzanine financing. c. automobile financing. d. seed money. e. staff financing.

Q: Banks rarely provide: a. start-up capital loans. b. mortgage loans. c. automobile loans. d. agricultural loans.. e. commercial loans.

Q: Agricultural loans became problem loans in mid-1980s for all of the following reasons except: a. land values dropped dramatically. b. there was a worldwide recession. c. the U.S. dollar got stronger. d. grain embargoes reduced demand for U.S. agricultural crops. e. banks stressed cash flow too much when originating these loans.

Q: A _______________________ is a post office box number controlled by the bank. a. syndication b. local c. lockbox d. maintenance box e. microhedge

Q: _______________________ represents the amount of long-term financing required for current assets. a. Permanent working capital b. Seasonal working capital c. Secondary working capital d. Perpetual working capital e. Passive working capital

Q: Days Accruals 10Days Cash 7Days Inventory 33Days Payables 21Days Receivables 35Average Daily COGS 15A loan where the entire principal is due at maturity is called a:a. balloon payment loan.b. sinking fund loan.c. mezzanine loan.d. bullet loan.e. highly leverage transaction loan.

Q: Days Accruals 10Days Cash 7Days Inventory 33Days Payables 21Days Receivables 35Average Daily COGS 15What are the firm's estimated working capital needs?a. $90b. $315c. $660d. $1,125e. $2,250