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
In theory, a firm’s optimal capital structure is that which minimized the firm’s overall cost of capital resulting in a maximization of the market value of a firm. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Bond contracts generally include restrictive covenants, designed to protect the interests of the bondholders. Typical covenants restrict all of the following EXCEPT: a. the borrowing firm’s investment activities. b. the borrowing firm’s ability to issue additional debt. c. the borrowing firm’s dividend policy. d. the firm’s hiring of management personnel. ANSWER D
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
The conservative funding strategy is a strategy by which a firm finances at least its seasonal requirements, and possibly some of its permanent requirements, with short-term funds and the balance of its permanent requirements with long-term funds. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Conflicts of interest between a borrowing firm and its creditors. This problem is exacerbated in the case of a public bond, because the ownership of public bonds is generally dispersed among many bondholders. For these reasons, the interests of the investors in a public corporate bond are protected in part by the appointment of a […]
Date: September 19th, 2020
