Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem1: Which of the following statements is most correct?

[A] A firm with excess production capacity and relatively low variable price would not be inclined to extend more liberal credit terms to its customers than a firm with similar costs that is operating close to capacity.

[B] Firms use seasonal dating primarily to decrease their DSO.

[C] If credit sales as a % of a firm’s total sales increases & the volume of credit sales also raise, then the firm’s accounts receivable will automatically increase.

[D] It is possible for a firm to overstate profits by offering very lenient credit terms which encourage additional sales to financially “weak” companies. A major disadvantage of such a policy is that it is likely to increase uncollectible accounts.

[E] Seasonal dating with terms 2/15, net 30 days, with April 1 dating, means that if the original sale took place on February 1st, the customer can take the discount up until March 15th, but must pay the net invoice amount by April 1st.

problem2: Find which of the following statements is incorrect about working capital policy?

[A] The cash budget is useful in determining future financing needs.

[B] Holding minimal levels of inventory can reduce inventory carrying costs and cannot lead to any adverse effects on profitability.

[C] A company may hold a relatively large amount of cash if it anticipates uncertain sales levels in the coming year.

[D] Credit policy has an impact on working capital since it has the potential to influence sales levels and the speed with which cash is collected.

[E] Managing working capital levels is important to the financial staff since it influences financing decisions and overall profitability of the company

problem3:  Determine which of the following statements is most correct?

[A] If the required compensating balance is larger than the transactions balance the firm would ordinarily hold, then the effective cost of any loan requiring such a balance is increased.

[B] Compensating balance requirements apply only to businesses, not to individuals.

[C] Compensating balances are essentially costless to most firms, because those firms would normally have such funds on hand to meet transactions needs anyway.

[D] Banks are prohibited from earning interest on the funds they force businesses to keep as compensating balances.

[E] All of the statements above are false.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M920004

Have any Question? 


Related Questions in Basic Finance

1 define the followinga time value of moneyb present valuec

1. Define the following: a. Time value of money b. Present value c. Discounting 2. How is the price of a financial asset related to the payments to be received from owning it?

Connectix inc recently issued noncallable bonds that mature

Connectix Inc. recently issued noncallable bonds that mature in 10 years. They have a par value of $1,000 and an annual coupon of 7.5%. If the current market interest rate is 7.7%, at what price should the bonds sell?

1 what is the advantage of using multiple measures for a

1. What is the advantage of using multiple measures for a single variable? What is the disadvantage? 2. Briefly explain how a ceiling effect (or floor effect) can affect the outcome of a research study.

Discussioncourse wrap-up please respond to the

Discussion "Course Wrap-Up" Please respond to the following: • Imagine you have completed your bachelor's degree at Strayer and you are searching for a job in finance, accounting or business. Using various employment web ...

Assessment task 1- referencing style apa with in text

Assessment Task 1: - Referencing style: APA with in text referencing - Answer each questions with references and (formulas if required) - showing the right formulae to be used, the steps shown in arriving at the answers, ...

1 a present an argument for why translation exposure is

1 .(a) Present an argument for why translation exposure is relevant to an MNC. (b) Present an argument for why translation exposure is not relevant to an MNC. 2 .Walt Disney Inc built the EuroDisney theme park in France ...

1 why do researchers use factor analysis2 imagine that you

1. Why do researchers use factor analysis? 2. Imagine that you conducted a factor analysis on a set of variables that were uncorrelated with one another. How many factors would you expect to find? Why?

One of the behavioral research case studies in this chapter

One of the Behavioral Research Case Studies in this chapter involved Agocha and Cooper's (1999) study of partner characteristics and intentions to practice safe sex. Below are the Pearson correlations between the lik ...

Identify general-purpose statements and communication

Identify general-purpose statements and communication objectives for several situations. Read the following situations and write a general-purpose statement and a specific communication objective-the results you want-for ...

A poll conducted by the new york times shows candidate a

A poll conducted by the New York Times shows candidate A leading candidate B by 33 to 31 percent. A poll conducted by the Washington Post shows candidate B leading candidate A by 34 to 32 percent. If the margin of error ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen