Question

ID: B Name: arrangement is one way for a firn to speed up the collection of payments from its customers 36. Errors in the sales forecast can be offset by similar errors in costs and income forecasts. Thus, as long as the the firm. errors are not large, sales forecast accuracy is not critical to growth in sales, assuming the firm is operating with a positive profit margin the foreign currency with the U.S. dollar 37. The te rm spontaneousty generated funds" generally refers to increases in the cash account that result from chase more of 38. When the value of the U.S. dollar appreciates against another country's currency, we may 39. A Eurodollar is a U S. dollar deposited in a bank outside the United States 40. If an investor can obtain more of a foreign currency for a dollar in the forward market than in the spot market, then the forward currency is said to be selling at a discount to the spot rate.

Answer 1

35. Its True that lockbox arranged helps to collect the payments in speedy manner. The lockbox is bank operated mailing address to which customers send their payments. The bank deposits the amount and send them payments and remittance information .

36. Its False that sales forecast errors can be mitigated with the errors in the costs. Forecasting errors  by have different factors affecting the sales as its mostly depended on the market response and customer feedback. So its not correct to ignore those facts.

37. This is false definition of Spontaneously generated funds. As Generally it is referred the amount raised in a year minus the amount of cash needed to finance the additional capital expenditures and working capital needed to support the firm’s growth

38. Its True when the USD is stronger against another country currency , more Foreign currency can be purchased as it foreign currency has weakned and is available with less value.

39.Its True. Eurodollar Means U.S. dollar deposits at foreign banks or at the overseas branches of American banks

40.This is true. Generally Forward market is unpredicatible and if the investor can obtain more from forward market , which means its trading with discount and Future market is uncertain