Firm C accounts payable for the month are $100,000 and its wages and salaries for the month are $100,000. What is its total outgoing cash flow for the month if its interest payments for the month are $50,000, its accounts receivable payments for the month are $100,000, and there are no other cash outflows for […]
Date: September 19th, 2020
The goal of the daily management of cash is to have sufficient cash on hand to pay the bills without carrying ________. A) excess debt B) excess sunk costs C) excess depreciation D) excess cash ANSWER Answer: D
Date: September 19th, 2020
TRUE or FALSE. Underwriter spreads on corporate bonds reflect substantial economies of scale. a. TRUE b. FALSE ANSWER A
Date: September 19th, 2020
The ________ of a firm is the amount of time required for a company to convert cash invested in its operations to cash received as a result of its operations. A) cash turnover B) cash conversion cycle C) average age of inventory D) average collection period ANSWER B
Date: September 19th, 2020
In the daily planning for cash or the cash forecast, we want to hone in on the management of cash as it applies to the ________ of the company. A) short-term borrowing and long-term investing B) long-term borrowing and short-term investing C) short-term borrowing and short-term investing D) long-term borrowing and long-term investing […]
Date: September 19th, 2020
Briefly describe the costs included in the production process. What will be an ideal response? ANSWER Answer: Production costs include the wages paid to workers, the raw materials for manufacturing products, the overhead (such as electricity, water, plant space, and so on), and the shipping costs that get the product to the customer.
Date: September 19th, 2020
We can condense the items that require cash outflow into basic categories. Which of the below is a basic category? A) Wages (but not commissions) B) Accounts receivable C) Long-term financing expenses (interest payments, dividend payments, issuing costs of debt and equity) D) All of these ANSWER Answer: C Explanation: C) We can […]
Date: September 19th, 2020
A firm has an operating profit of $300,000, interest of $35,000, and a tax rate of 40 percent. The firm has an after-tax cost of debt of 5 percent and a cost of equity of 15 percent. The firm’s target capital structure is set at a mix of 40 percent debt and 60 percent equity. […]
Date: September 19th, 2020
The public market for new speculative-grade bonds, also known as high-yield or junk bonds, was created virtually single-handedly by Michael Milken and his firm, Drexel Burnham Lambert, in the late 1970s. Prior to that time, the only corporate bonds that carried a speculative-grade rating were so-called _____, bonds that initially garnered an investment-grade rating, but […]
Date: September 19th, 2020
Firm A cash sales for the month are $200,000 and its accounts receivable payments for the month are $100,000. What is its total incoming cash flow for the month if its beginning cash for the month is $50,000 and there are no other cash inflows for the month? A) $100,000 B) $150,000 C) $300,000 D) […]
Date: September 19th, 2020
