In response to competition from the Eurobond market, the SEC adopted _____ in 1990, which allows firms to issue bonds in the U.S. market with minimal regulatory red tape as long as they are sold only to qualified investors (e.g., financial institutions). a. the Nonregistration Exception b. Qualified Investors Rule (QIR) c. Rule 99B d. […]
Firm E cash sales in January are $200,000, its accounts receivable payments for January are $100,000, its beginning cash for January is $50,000, and there are no other cash inflows for January. Its accounts payable payments for the January are $100,000 and its wages and salaries for January are $100,000, and its interest payments for […]
Excess cash is an asset that has a/an ________ due to lost earning power for the company. A) opportunity cost B) cash cost C) sunk cost D) erosion cost ANSWER Answer: A
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 […]
According to the traditional approach to capital structure, the value of a firm will be maximized when ________. A) the financial leverage is maximized B) the cost of debt is minimized C) the weighted average cost of capital is minimized D) the dividend payout is maximized ANSWER C
It is ________ of cash flow that is important to the financial manager. A) the timing and amount B) just the timing C) just the amount D) None of the above ANSWER Answer: A
Tryst Energy Inc has an average age of inventory of 65 days, an average collection period of 60 days and an average payment period of 65 days. The firm’s total annual outlays for operating cycle investments are $3.65 million. Assuming a 365-day year, how much financing is required to support its cash conversion cycle? A) […]
In 1982, the SEC adopted Rule 415, also known as the _ rule, which allows qualifying firms to register a bond offering and then sell it either as a whole or piecemeal at any time over several years. a. delayed registration b. deferred registration c. shelf registration d. piecemeal registration ANSWER C
Cash disbursements (expenditures) are not closely tied to the sales forecast as the sales forecasts are not typically used for scheduling production. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Cash disbursements (expenditures) ARE CLOSELY tied to the sales forecast as the sales forecasts ARE TYPICALLY used for scheduling […]
The timing and the amount of cash flow is important to the financial manager and estimating these cash outflows is part of the ________ process A) income forecasting B) revenue forecasting C) cash forecasting D) cost forecasting ANSWER Answer: C
