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
Poor capital structure decisions can result in ________ the cost of capital, resulting in ________ acceptable investments. A) increasing; fewer B) decreasing; more C) increasing; more D) decreasing; fewer ANSWER A
Date: September 19th, 2020
Under conservative funding strategy, short-term financing is used only to finance an emergency, an unexpected outflow of funds, and the variable portion of a firm’s current assets. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
In _, an issuing firm solicits bids from among several investment banks for the job of underwriting a bond issue. a. competitive bidding b. negotiated underwriting c. aggressive bidding d. bargain bidding ANSWER A
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
Briefly explain the difference between a USE of cash and a SOURCE of cash. Give examples of each. Briefly explain why managers want to know the uses and sources of cash. What will be an ideal response? ANSWER Answer: A source of cash involves cash receipts or cash inflow, while a use of […]
Date: September 19th, 2020
The amount and timing of sales are usually provided by the ________ department. A) advertising or finance B) accounting or sales C) sales or marketing D) marketing or planning c ANSWER Answer: C
Date: September 19th, 2020
We start the process of building a cash forecast with predicting the cash inflow from future sales. This is called ________. A) a sales forecast B) a cash forecast C) a monetary forecast D) an expense forecast ANSWER Answer: A
Date: September 19th, 2020
