A company has a beginning cash balance of $50,000. Its weekly cash flow forecast shows the following information for the next three weeks.

Which of the following statements is true?

• A.Week 1 ending cash balance is the highest of the three weeks.
• B.The cash balance at the beginning of the three weeks is the highest of the three weeks.
• C.Week 3 ending cash balance is the highest of the three weeks.
• D.Week 2 ending cash balance is the highest of the three weeks.

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Optimal dividend policy is one that does all of the following EXCEPT:

• A.maximize shareholder value.
• B.maintain adequate retained earnings for future growth.
• C.distribute corporate income to investors.
• D.balance tax shield benefits against agency costs.

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A company sells products to customers on credit, generating accounts receivable. The company uses the accrual accounting method. Once the company collects good funds from its customers, what is the impact on the financial statements of the company?

• A.Cash balance is increased, and income is increased.
• B.Cash balance is not affected, and income is increased.
• C.Cash balance is increased, and income is not affected.
• D.Cash balance is increased, and income is decreased.

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Which of the following factors will allow a company to decrease the amount of collected balances required to compensate its bank for services?

• A.An increase in FDIC insurance charges
• B.A carry-over of a prior period's deficient balance
• C.An increase in the bank's earnings credit rate
• D.An increase in the bank's reserve requirement

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Which of the following will exempt commercial paper from SEC registration?
I. A maturity of fewer than 270 days
II. A rating grade of A-1 or P-1
III. Distribution through a licensed dealer
IV. Backing by a U.S. bank letter of credit

• A.II, III, and IV only
• B.I and II only
• C.I only
• D.IV only

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