BUS 320 Study Guide - Midterm Guide: Reborrowing, Current Asset, Cash Flow

• School: NCSU
• Department: Business Management
• Course: BUS 320
• Professor: Bartley R Danielsen

Document Summary

Liquidating current assets is like liquidating fixed assets since they have lives greater than one year. (f) One of the primary benefits of implementing supply chain management is reducing inventory on hand. (t) The cash budget combines the cash receipts and cash payments schedules in determining cash flow. (t) Ideally, permanent current assets should be financed exclusively with short-term borrowings(f) Increased use of long-term financing is generally a more conservative approach to current asset financing(t) A risky financial plan will use long-term financing for fixed assets, permanent current assets, and a portion of temporary current assets(f) Sauer food company has decided to buy a new computer system with an expected life of three years. The company can borrow ,000 for three years at 12 percent annual interest or for one year at 10 percent annual interest. Collins systems inc. , is trying to develop an asset-financing plan.