________ consists of items such as the current interest rates, housing starts, gross national product (GNP), disposable income estimates, or other economic indicators. A) Accounting data B) Internal data C) External data D) Financial data ANSWER Answer: C Explanation: C) The amount of sales a company predicts is a function of external data, […]
A SOURCE of cash is utility payments. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: A USE of cash is utility payments.
The overriding objective of the capital structure decision should be to choose the level of debt that results in the largest possible share price. Indicate whether the statement is true or false ANSWER TRUE
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.
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 […]
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
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
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
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 […]
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 […]
