For estimating cash budget timing, the sale of equipment might occur in one month and the tax consequence in another month. Indicate whether the statement is true or false. ANSWER Answer: TRUE
Date: September 19th, 2020
Sales from a company’s products and services are the only source of cash inflow. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Although sales from a company’s products and services will usually be the main source of cash inflow, other activities can generate cash receipts. For example, companies can […]
Date: September 19th, 2020
The sales for October, November, and December 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: 20% in cash from that same month of sales; 50% in cash from the previous month’s sales; and 30% in cash from the […]
Date: September 19th, 2020
Sales made and actual cash received may differ for any particular month. However, sales and cash received must be equal for a calendar year. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: There is no need nor expectation that these two values be the same in any particular year.
Date: September 19th, 2020
A USE of cash is interest payments received. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: A use of cash is interest payments MADE.
Date: September 19th, 2020
The sales for October, November and December are $10,000, $12,000 and $18,000, respectively. For any particular month of sales, the following percentages are received over time in cash: 20% in cash from that same month of sales; 50% in cash from the previous month’s sales; and, 30% in cash from the sales from two months […]
Date: September 19th, 2020
If we assume that EBIT is constant, the value of a firm is maximized by minimizing the weighted average cost of capital. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
One aspect of risk associated with the aggressive strategy’s maximum use of short-term financing is the fact that changing short-term interest rates can result in significantly higher borrowing. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Regarding corporate bonds, if the issuing firm does not pledge specific assets as collateral, the bond is called a _. a. debenture b. mortgage c. chattel mortgage d. note ANSWER A
Date: September 19th, 2020
Bacon Signs will have cash receipt of $80,000 in December and cash disbursements in December of $70,000. If its beginning cash is $4,000 and its desired reserve is $15,000, what will Bacon Signs’ cash situation be at the end of December? What will be an ideal response? ANSWER Answer: To know Bacon’s cash […]
Date: September 19th, 2020
