1) You are creating a managerial balance sheet for a company you are considering

Question

1)
You are creating a managerial balance sheet for a company you are
considering purchasing. You are told the company has arranged to pay
suppliers in cash 30 days after it receives the materials it has bought. The
company purchases about $90 million per year of supplies and it has
revenues of $200 million. What is the accounts payable in millions of $ ?

2)
Biotechnology companies always have a higher ROIC than companies
that make cement for roads because it takes more R&D to do
biotechnology ?
True False2
3)
The following are

Explanation / Answer

30 = accounts payable/(90 milion/365)

Accounts payable = 7.40 million

3) (D) Experimenting

4) (A) Choosing what to focus on

5) C) There are low barriers to entry
(D) Substitutes are a threat

6) (A) Secure a loan from a bank
(B) Have friends invest and take an equity stake
(C) Invest themselves and take an equity stake
(D) Give the company a loan from their own savings
(E) Approach investors by presenting their ideas and plans to
create value and have them take an equity stake

7) (B) Eventually the price of alcohols should fall too

8) (A) Long

9) A) Go long something that has a price correlated with iron ore

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