FIN 300 Ch 15 Practice Quiz With
Complete Solutions
The _____ current asset investment policy calls for relatively large amounts of current
assets to be carried by a company.
a. relaxed
b. restricted
c. moderate
d. lean-and-mean
e. speculative - ANSWER a
Which of the following current asset investment policies emphasizes holding minimal
current assets?
a. Relaxed current asset investment policy
b. Restricted current asset investment policy
c. Moderate current asset investment policy
d. Fat cat current asset investment policy
e. Precautionary current asset investment policy - ANSWER b
A firm that follows a restricted current asset investment policy generally has:
a. Uncertain sales.
b. Relatively low levels of accounts receivable.
c. A lower return on investment, especially on current assets, than a firm that follows a
relaxed current investment policy.
d. A cash conversion cycle greater than the average firm in the industry.
e. The highest inventory conversion period in the industry. - ANSWER b
The lower the level of current assets that is required to support its operations, the more
closely a firm can adhere to a _____ current asset investment policy.
a. relaxed
b. restricted
c. moderate
d. lean-and-mean
e. precautionary - ANSWER b
Complete Solutions
The _____ current asset investment policy calls for relatively large amounts of current
assets to be carried by a company.
a. relaxed
b. restricted
c. moderate
d. lean-and-mean
e. speculative - ANSWER a
Which of the following current asset investment policies emphasizes holding minimal
current assets?
a. Relaxed current asset investment policy
b. Restricted current asset investment policy
c. Moderate current asset investment policy
d. Fat cat current asset investment policy
e. Precautionary current asset investment policy - ANSWER b
A firm that follows a restricted current asset investment policy generally has:
a. Uncertain sales.
b. Relatively low levels of accounts receivable.
c. A lower return on investment, especially on current assets, than a firm that follows a
relaxed current investment policy.
d. A cash conversion cycle greater than the average firm in the industry.
e. The highest inventory conversion period in the industry. - ANSWER b
The lower the level of current assets that is required to support its operations, the more
closely a firm can adhere to a _____ current asset investment policy.
a. relaxed
b. restricted
c. moderate
d. lean-and-mean
e. precautionary - ANSWER b
