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problem1: Ski Lifts Inc. is a highly seasonal business. The following summary balance sheet provides data for peak and off peak seasons [in thousands of dollars]:


       Peak   Off-peak



        $ 50 

   $ 30 

                     Marketable securities



                     Accounts receivable






                     Net fixed assets   










       $ 30

    $ 10

                     Short-term debt



                     Long-term debt   



                     Common equity     






From this information we may conclude that

[A] Ski Lifts have a working capital financing policy of exactly matching asset and liability maturities.

[B] Ski Lifts' working capital financing policy is relatively aggres­sive; that is, the company finances some of its permanent assets with short term discretionary debt.

[C] Ski Lifts follow a relatively conservative approach to working capital financing; that is, some of its short-term needs are met by permanent capital.

[D] Without income statement data, we cannot determine the aggressiveness or conservatism of the company's working capital financing policy.

[E] Both statements A and C are correct.

problem2:  Which one of the following aspects of banks is considered most relevant to businesses when choosing a bank?

[A] Size of the bank's deposits.

[B] Experience of personnel.

[C] Loyalty and willingness to assume lending risks.

[D] Convenience of location.

[E] Competitive cost of services provided

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M919515

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