Which of the following is a goal of working capital management? To ensure liquidity and increase...
- To ensure liquidity and increase cash holding costs
- To balance adequate cash flow against maximal returns
- To minimize free working capital and maximize opportunity costs
- To lengthen the span of time between payment of accounts payable and collection of accounts receivable
Homework Answers
Answer : Balance adequate cash flows against maximal returns
Ensure liquidity and increase cash holding costs is not the goal of working capital management. Cash holding costs must be minimised.
Minimising free working capital and maximising opportunity costs also is not an objective of working capital management. Opportunity cost is the benefit that is foregone by choosing one alternative over another.
Lengthening the span of time of payables and receivables also is not the goal of working capital management.
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Which of the following is a goal of working capital management?
To ensure liquidity and increase...
Which of the following is a goal of working capital management? To manage long-term assets in...
Which of the following is a goal of working capital management? To manage long-term assets in a way that maximizes returns To ensure liquidity while reducing opportunity costs To elongate the cash conversion cycle To generate as much free working capital as possible
Kiran needs additional short-term financing for his robotics company, so he asks his suppliers if they...
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Working capital is considered to be one of the prime indicators of liquidity. True False Question...
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Please list the formula and definition of each term this will be your cheat sheet Liquidity...
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Canyon Tours showed the following components of working capital last year: Beginning End of Year Accounts...
Canyon Tours showed the following components of working capital last year: Beginning End of Year Accounts receivable $24,600 $19,400 Inventory 10,100 14,400 Accounts payable 15,200 18,700 a. What was the change in net working capital during the year? (Use the minus sign to enter negative changes, if any.) ΔNWC $ ______ b. If sales were $37,800 and costs were $20,200, what was cash flow for the year? Ignore taxes. (Use the minus sign to enter negative changes, if any.)...
Canyon Tours showed the following components of working capital last year: Beginning End of Year Accounts...
Canyon Tours showed the following components of working capital last year: Beginning End of Year Accounts receivable $23,100 $21,800 Inventory 10,500 14,800 Accounts payable 15,200 17,700 a. What was the change in net working capital during the year? (Use the minus sign to enter negative changes, if any.) ΔNWC ($) = ? b. If sales were $34,900 and costs were $23,900, what was cash flow for the year? Ignore taxes. (Use the minus sign to enter negative changes, if...
(Related to Checkpoint 12.1) (Calculating changes in net operating working capital) Tetious Dimensions is introduc...
(Related to Checkpoint 12.1) (Calculating changes in net operating working capital) Tetious Dimensions is introducing a new product and has an expected change in net operating income of $765,000. Tetious Dimensions has a 32 percent marginal tax rate. This project will also produce $220,000 of depreciation per year. In addition, this project will cause the following changes in year 1: Without the Project with the Project Accounts receivable Inventory Accounts payable $53,000 94,000 66,000 $95,000 184,000 118,000 What is the...
(Related to Checkpoint 12.1) (Calculating changes in net operating working capital) Tetious Dimensions is introducing a...
(Related to Checkpoint 12.1) (Calculating changes in net operating working capital) Tetious Dimensions is introducing a new product and has an expected change in net operating income of $765,000. Tetious Dimensions has a 36 percent marginal tax rate. This project will also produce $210,000 of depreciation per year. In addition, this project will cause the following changes in year 1: Without the Project With the Project Accounts receivable Inventory Accounts payable $56,000 103,000 69,000 $95,000 184,000 124,000 What is the...
(Related to Checkpoint 12.1) (Calculating changes in net operating working capital) Tetious Dimensions is introducing a...
(Related to Checkpoint 12.1) (Calculating changes in net operating working capital) Tetious Dimensions is introducing a new product and has an expected change in net operating income of $765,000. Tetious Dimensions has a 30 percent marginal tax rate. This project will also produce $220,000 of depreciation per year. In addition, this project will cause the following changes in year 1: Without the Project With the Project Accounts receivable Inventory Accounts payable $54,000 101,000 67,000 $85,000 184,000 115,000 What is the...
Working capital is considered to be one of the prime indicators of liquidity. True False Question 10 (1 point) The operating cash flow/total debt ratio is one that indicates a firm's ability to meet its current maturities of debt. True False Question 11 (1 point) Management should not use the statement of cash flows for which of the following purposes? To determine cash flow from financing activities To determine the balance in accounts receivable To determine cash low from investing...
(Related to Checkpoint 12.1) (Calculating changes in net operating working capital) Tetious Dimensions is introducing a new product and has an expected change in net operating income of $765,000. Tetious Dimensions has a 32 percent marginal tax rate. This project will also produce $220,000 of depreciation per year. In addition, this project will cause the following changes in year 1: Without the Project with the Project Accounts receivable Inventory Accounts payable $53,000 94,000 66,000 $95,000 184,000 118,000 What is the...
(Related to Checkpoint 12.1) (Calculating changes in net operating working capital) Tetious Dimensions is introducing a new product and has an expected change in net operating income of $765,000. Tetious Dimensions has a 36 percent marginal tax rate. This project will also produce $210,000 of depreciation per year. In addition, this project will cause the following changes in year 1: Without the Project With the Project Accounts receivable Inventory Accounts payable $56,000 103,000 69,000 $95,000 184,000 124,000 What is the...
(Related to Checkpoint 12.1) (Calculating changes in net operating working capital) Tetious Dimensions is introducing a new product and has an expected change in net operating income of $765,000. Tetious Dimensions has a 30 percent marginal tax rate. This project will also produce $220,000 of depreciation per year. In addition, this project will cause the following changes in year 1: Without the Project With the Project Accounts receivable Inventory Accounts payable $54,000 101,000 67,000 $85,000 184,000 115,000 What is the...
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