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
Which of the below is a SOURCE of cash? A) Cash Sales B) Wages and Salaries C) Rent or Lease payments D) Dividend payments ANSWER Answer: A Explanation: A) The sources of cash (cash receipts or cash inflow) are: cash sales; payments received on accounts receivables (mainly credit sales); cash sales of equipment […]
Date: September 19th, 2020
Which of the below is a USE of cash? A) Credit Sales B) Retirement of debt (paying off loans and bonds) C) Bank loans D) Cash sales of equipment or other assets of the company ANSWER Answer: B Explanation: B) The sources of cash (cash receipts or cash inflow) are: cash sales; payments […]
Date: September 19th, 2020
Masulis (1980) documented evidence that the market generally reacts favorably to a leverage- increasing debt-for-equity swap, and unfavorably to a leverage decreasing equity-for-debt swap. Which of the following is NOT a legitimate theoretical explanation for these market reactions? a. Increasing leverage increases the tax shield of debt, while extinguishing debt decreases it. b. Increasing leverage […]
Date: September 19th, 2020
Pearson Advising will have cash receipts of $35,000 in April and cash disbursements of $30,000 for this month. If its beginning cash is $5,000 and its desired reserve is $2,000, what will its excess be for April? A) There is no excess but a shortfall. B) $5,000 C) $7,000 D) $8,000 ANSWER Answer: […]
Date: September 19th, 2020
Forecasting entails drawing a financial picture of a company for the ________. A) year B) month C) quarter D) All of these ANSWER Answer: D
Date: September 19th, 2020
For June, Snake River Rafting will have cash receipts of $68,000 and cash disbursements of $85,000. If its beginning cash is $9,000 and its desired reserve is $3,000, what will be its shortfall in cash for the month? A) There is no shortfall in cash but an excess of cash. B) -$11,000 C) -$8,000 D) […]
Date: September 19th, 2020
