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
Date: September 19th, 2020
In the traditional approach to capital structure, as the amount of debt increases in a firm’s capital structure, ________. A) the cost of equity rises faster than the cost of debt B) the cost of debt rises faster than the cost of equity C) debt becomes less risky D) equity cost is unaffected […]
Date: September 19th, 2020
Products, but not services, need to be available to customers at the time customers need them. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Products AND SERVICES need to be available to customers at the time customers need them.
Date: September 19th, 2020
Underwriter generally places non-solicitation advertisements in the Wall Street Journal and/or other important newspapers notifying the public of the availability of an issue. These are called _____. a. tombstone ads b. headstone ads c. notifications of availability d. bond issue schedules ANSWER A
Date: September 19th, 2020
Beginning with a zero-leverage company, as debt is substituted for equity in the capital structure ________. A) the overall cost of capital first rises, reaches a maximum, and then declines B) the overall cost of capital declines C) the overall cost of capital first declines, reaches a minimum, and then rises D) the overall cost […]
Date: September 19th, 2020
The risk of the conservative funding requirements is low because of its high level of net working capital, and the fact that the strategy does not require a firm to use any of its limited short-term borrowing capacity. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Essentially, a convertible bond is a portfolio of: a. a bond and an automobile whose top can be removed. b. an otherwise equivalent nonconvertible bond and shares of the issuing firm’s stock. c. an otherwise equivalent nonconvertible bond and a call option on the firm’s stock. d. an otherwise equivalent nonconvertible bond and a put […]
Date: September 19th, 2020
The sales for January, February, and March are $50,000, $80,000 and $120,000, respectively. For any particular month of sales, the following percentages are received over time in cash: 40% in cash from that same month of sales; 50% in cash from the previous month’s sales; and, 10% in cash from the sales from two months […]
Date: September 19th, 2020
A financial manager needs to know if any of the credit sales will not be paid by customers. This situation will entail a reduction in the estimate of the cash flow due to “bad debts.” Indicate whether the statement is true or false. ANSWER Answer: TRUE
Date: September 19th, 2020
The sales for January, February, and March are $2,000, $6,000 and $10,000, respectively. For any particular month of sales the following percentages are received over time in cash for any given month: 50% in cash from that same month of sales; 30% in cash from the previous month’s sales; and 20% in cash from the […]
Date: September 19th, 2020
