FINA 3313 Final Exam Questions with Correct Answers Latest Update 2025/2026
American Products is concerned about managing cash efficiently. On the average, inventories
have an age of 86 days, and accounts receivable are collected in 56 days. Accounts payable are
paid approximately 33 days after they arise. The firm has annual sales of about $32 million.
COGS are $18 million and purchases are $14 million.
The cash conversion cyle is _____________ days. - Answers 109
OC = AAI + ACP =86 +56 = 142
AAI= Average age of inventory = (INV/COGS) X 365
ACP = Average collection period = (AR/REV) X 365
CCC = OC - APP = 142 - 33 = 109
APP = Average payment period = AP/COGS X 365
American Products is concerned about managing cash efficiently. On the average, inventories
have an age of 86 days, and accounts receivable are collected in 56 days. Accounts payable are
paid approximately 33 days after they arise. The firm has annual sales of about $32 million.
COGS are $18 million and purchases are $14 million. USE Purchases formula
The amount of resources need to support the firm's cash conversion cycle is $_______________.
(no $ sign in answer) - Answers 7,884,932
OC = AAI + ACP =86 +56 = 142
AAI= Average age of inventory = (INV/COGS) X 365
,ACP = Average collection period = (AR/REV) X 365
CCC = OC - APP = 142 - 56 = 109
APP = Average payment period = AP/COGS X 365
Inventory = COGS X (AAI/365) = $18,000,000 X (86/365) = $4,241,096
Accounts Receivable = REV X (ACP/365) = $32,000,000 X (56/365) = $4,909,589
Accounts Payable = PURCHASES X (APP/365) = $14,000,000 X (33/365) = $1,265,753
Resources Invested = NWC = INV + AR - AP = $4,241,096 + $4,909,589 - $1,265,753
Mav, Inc. wants to borrow $10,000 @ 10% APR for 1 year. If this is a fixed rate loan and the
interest is paid at maturity what is the effective annual rate for this loan? (in percent terms but
without % sign) - Answers 10
Mav, Inc. wants to borrow $10,000 @ 10% APR for 1 year. If this is a fixed rate discount loan
what is the effective annual rate? (in percent terms but without % sign) - Answers 11.1
Effective Annual Intertest Rate for a discount loan is Interest/(Amount borrowed - Interest)
= $1000/($10,000-$1,000)
Mr. John Hall (UTA's VP of facilities) notes that the solar cells on top of the parking garages
were funded by a grant that required the university to pay for 20% of the solar cells (total cost of
the solar cells was 2.25 million USD). The solar cells save about $72,000 per year in electricity
costs and have an expected life of 30 years. Ignoring inflation, what is the IRR of the project
from UTA's perspective? - Answers 15.8%
, The credit terms for 2 suppliers are as follows;
Xpress Widgets, Inc. 1/10 net 60
Rapid Rabbits Comglomerated 2/10 net 90
What is the approximate cost of giving up the discount offered by Xpress Widgets? - Answers
7.3
The credit terms for 2 suppliers are as follows;
Xpress Widgets, Inc. 1/10 net 60
Rapid Rabbits Comglomerated 2/10 net 90
What is the EFFECTIVE ANNUAL cost of giving up the discount offered by Xpress Widgets? -
Answers 7.53
The credit terms for 2 suppliers are as follows;
Xpress Widgets, Inc. 1/10 net 60
Rapid Rabbits Comglomerated 2/10 net 90
What is the approximate cost of giving up the discount offered by Rapid Rabbits? - Answers
9.13
The credit terms for 2 suppliers are as follows;
Xpress Widgets, Inc. 1/10 net 60
Rapid Rabbits Comglomerated 2/10 net 90
Assume your firm is unable to take advantage of the discounts and its bank offers short term
American Products is concerned about managing cash efficiently. On the average, inventories
have an age of 86 days, and accounts receivable are collected in 56 days. Accounts payable are
paid approximately 33 days after they arise. The firm has annual sales of about $32 million.
COGS are $18 million and purchases are $14 million.
The cash conversion cyle is _____________ days. - Answers 109
OC = AAI + ACP =86 +56 = 142
AAI= Average age of inventory = (INV/COGS) X 365
ACP = Average collection period = (AR/REV) X 365
CCC = OC - APP = 142 - 33 = 109
APP = Average payment period = AP/COGS X 365
American Products is concerned about managing cash efficiently. On the average, inventories
have an age of 86 days, and accounts receivable are collected in 56 days. Accounts payable are
paid approximately 33 days after they arise. The firm has annual sales of about $32 million.
COGS are $18 million and purchases are $14 million. USE Purchases formula
The amount of resources need to support the firm's cash conversion cycle is $_______________.
(no $ sign in answer) - Answers 7,884,932
OC = AAI + ACP =86 +56 = 142
AAI= Average age of inventory = (INV/COGS) X 365
,ACP = Average collection period = (AR/REV) X 365
CCC = OC - APP = 142 - 56 = 109
APP = Average payment period = AP/COGS X 365
Inventory = COGS X (AAI/365) = $18,000,000 X (86/365) = $4,241,096
Accounts Receivable = REV X (ACP/365) = $32,000,000 X (56/365) = $4,909,589
Accounts Payable = PURCHASES X (APP/365) = $14,000,000 X (33/365) = $1,265,753
Resources Invested = NWC = INV + AR - AP = $4,241,096 + $4,909,589 - $1,265,753
Mav, Inc. wants to borrow $10,000 @ 10% APR for 1 year. If this is a fixed rate loan and the
interest is paid at maturity what is the effective annual rate for this loan? (in percent terms but
without % sign) - Answers 10
Mav, Inc. wants to borrow $10,000 @ 10% APR for 1 year. If this is a fixed rate discount loan
what is the effective annual rate? (in percent terms but without % sign) - Answers 11.1
Effective Annual Intertest Rate for a discount loan is Interest/(Amount borrowed - Interest)
= $1000/($10,000-$1,000)
Mr. John Hall (UTA's VP of facilities) notes that the solar cells on top of the parking garages
were funded by a grant that required the university to pay for 20% of the solar cells (total cost of
the solar cells was 2.25 million USD). The solar cells save about $72,000 per year in electricity
costs and have an expected life of 30 years. Ignoring inflation, what is the IRR of the project
from UTA's perspective? - Answers 15.8%
, The credit terms for 2 suppliers are as follows;
Xpress Widgets, Inc. 1/10 net 60
Rapid Rabbits Comglomerated 2/10 net 90
What is the approximate cost of giving up the discount offered by Xpress Widgets? - Answers
7.3
The credit terms for 2 suppliers are as follows;
Xpress Widgets, Inc. 1/10 net 60
Rapid Rabbits Comglomerated 2/10 net 90
What is the EFFECTIVE ANNUAL cost of giving up the discount offered by Xpress Widgets? -
Answers 7.53
The credit terms for 2 suppliers are as follows;
Xpress Widgets, Inc. 1/10 net 60
Rapid Rabbits Comglomerated 2/10 net 90
What is the approximate cost of giving up the discount offered by Rapid Rabbits? - Answers
9.13
The credit terms for 2 suppliers are as follows;
Xpress Widgets, Inc. 1/10 net 60
Rapid Rabbits Comglomerated 2/10 net 90
Assume your firm is unable to take advantage of the discounts and its bank offers short term
