Homework Answers
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Question no |
answer |
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1- |
self liquidating |
|
2- |
selling off inventories |
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3- |
long term, short term |
|
4- |
upward sloping, downward sloping |
|
5- |
long term funds |
|
6- |
the cash flow cycle |
|
7- |
convert current assets into cash quickly |
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Temporary current assets are those assets that are Multiple Choice Capital assets. Semi-permanent. Self-liquidating Permanent assets...
Capital assets are usually financed with Multiple Choice short-term funds. long-term funds. permanent funds self-liquidating funds
Capital assets are usually financed with Multiple Choice short-term funds. long-term funds. permanent funds self-liquidating funds
Usually yield curves arebut during peak periods of economic expansion yield curves may be Multiple Choice...
Usually yield curves arebut during peak periods of economic expansion yield curves may be Multiple Choice upward sloping, downward sloping downward sloping: sharply peaked downward sloping; upward sloping upward sloping, normally humped
Sherlock Homes, a manufacturer of lowcost mobile housing, has $5,100,000 in assets. Temporary current assets Permanent...
Sherlock Homes, a manufacturer of lowcost mobile housing, has $5,100,000 in assets. Temporary current assets Permanent current assets Capital assets $1,120,000 1,740,000 2, 240,000 Total assets $5,100,000 Short-term rates are 12 percent. Long-term rates are 8 percent. (Note that long-term rates imply a return to any equity). Earnings before interest and taxes are $1,080,000. The tax rate is 40 percent. Assume the term structure of interest rates becomes inverted, with short- term rates going to 12 percent and long-term rates...
Sherlock Homes, a manufacturer of low-cost mobile housing, has $4,500,000 in assets. Temporary current assets Permanent...
Sherlock Homes, a manufacturer of low-cost mobile housing, has $4,500,000 in assets. Temporary current assets Permanent current assets Capital assets $1,000,000 1,500,000 2,000,000 Total assets $4,500,000 Short-term rates are 8 percent. Long-term rates are 13 percent. (Note that long-term rates imply a return to any equity). Earnings before interest and taxes are $960,000. The tax rate is 40 percent. If long-term financing is perfectly matched (hedged) with long-term asset needs, and the same is true of short-term financing, what will...
Which of the following statements is true A Interest rates on bonds of different maturities tend...
Which of the following statements is true A Interest rates on bonds of different maturities tend to move together over time O B. Yield curves almost always slope downward. O c. when short-term interest rates are low. yield curves tend to be inverted. D. When short-term interest rates are high, yield curves tend to be upward sloping According to the segmented markets theory of the term structure of interest rates, if bondholders prefer short-term bonds to long-term bonds, the yield...
Suppose a firm wants to take advantage of an upward-sloping yield curve. If the firm believes...
Suppose a firm wants to take advantage of an upward-sloping yield curve. If the firm believes that interest rates will stay constant and it wants to use the current yield curve to bolster profits, which approach should the firm follow? O Conservative approach O Aggressive approach O Maturity matching approach Suppose a firm occasionally faces demand for short-term credit but usually has an excess of short-term capital to finance current assets. Which approach is the firm following? Conservative approach O...
help these are multiple choice 20. When a firm employs no debt: a. It has a...
help these are multiple choice
20. When a firm employs no debt: a. It has a financial leverage of one b. It has financial leverage of zero C. Its operating leverage is equal to its financial leverage d. It will not be prifitable e. None of the above. 21. Under normal conditions, with 60% probability, financing Plan A produces a return $35,000 higher than Plan B; under tight money conditions, with 45% probability, Plan A produces a return of $40,000...
Long-term investments: Multiple Choice Are current assets. Can include funds designated for a special purpose, or...
Long-term investments: Multiple Choice Are current assets. Can include funds designated for a special purpose, or investments in land not used in the company’s operations. Must be readily convertible to cash. Are expected to be converted into cash within one year. Include only equity securities.
1. Which of the following BEST describes a company's proper liquidity management? Multiple Choice Liquitity management...
1. Which of the following BEST describes a company's proper liquidity management? Multiple Choice Liquitity management is a balancing act; managers try to find liquidity levels that are neither too high not too low. A Financial Manager will try to keep as much cash on the books as possible to maximize short-term earnings. A company should never keep cash in its account because bond coupon payments can be deferred for up to a year without penalty. Liquidity levels that are...
P 6-24 Required Answer the following multiple-choice questions: a. A company's current ratio is 2.2 to...
P 6-24 Required Answer the following multiple-choice questions: a. A company's current ratio is 2.2 to 1 and quick (acid-test) ratio is 1.0 to 1 at the beginning of the year. At the end of the year, the company has a current ratio of 2.5 to 1 and a quick ratio of 0.8 to 1. Which of the following could help explain the divergence in the ratios from the beginning to the end of the year? (continued R6-Liquidity of Short...
Capital assets are usually financed with Multiple Choice short-term funds. long-term funds. permanent funds self-liquidating funds
Usually yield curves arebut during peak periods of economic expansion yield curves may be Multiple Choice upward sloping, downward sloping downward sloping: sharply peaked downward sloping; upward sloping upward sloping, normally humped
Sherlock Homes, a manufacturer of lowcost mobile housing, has $5,100,000 in assets. Temporary current assets Permanent current assets Capital assets $1,120,000 1,740,000 2, 240,000 Total assets $5,100,000 Short-term rates are 12 percent. Long-term rates are 8 percent. (Note that long-term rates imply a return to any equity). Earnings before interest and taxes are $1,080,000. The tax rate is 40 percent. Assume the term structure of interest rates becomes inverted, with short- term rates going to 12 percent and long-term rates...
Sherlock Homes, a manufacturer of low-cost mobile housing, has $4,500,000 in assets. Temporary current assets Permanent current assets Capital assets $1,000,000 1,500,000 2,000,000 Total assets $4,500,000 Short-term rates are 8 percent. Long-term rates are 13 percent. (Note that long-term rates imply a return to any equity). Earnings before interest and taxes are $960,000. The tax rate is 40 percent. If long-term financing is perfectly matched (hedged) with long-term asset needs, and the same is true of short-term financing, what will...
Which of the following statements is true A Interest rates on bonds of different maturities tend to move together over time O B. Yield curves almost always slope downward. O c. when short-term interest rates are low. yield curves tend to be inverted. D. When short-term interest rates are high, yield curves tend to be upward sloping According to the segmented markets theory of the term structure of interest rates, if bondholders prefer short-term bonds to long-term bonds, the yield...
Suppose a firm wants to take advantage of an upward-sloping yield curve. If the firm believes that interest rates will stay constant and it wants to use the current yield curve to bolster profits, which approach should the firm follow? O Conservative approach O Aggressive approach O Maturity matching approach Suppose a firm occasionally faces demand for short-term credit but usually has an excess of short-term capital to finance current assets. Which approach is the firm following? Conservative approach O...
help these are multiple choice
20. When a firm employs no debt: a. It has a financial leverage of one b. It has financial leverage of zero C. Its operating leverage is equal to its financial leverage d. It will not be prifitable e. None of the above. 21. Under normal conditions, with 60% probability, financing Plan A produces a return $35,000 higher than Plan B; under tight money conditions, with 45% probability, Plan A produces a return of $40,000...
P 6-24 Required Answer the following multiple-choice questions: a. A company's current ratio is 2.2 to 1 and quick (acid-test) ratio is 1.0 to 1 at the beginning of the year. At the end of the year, the company has a current ratio of 2.5 to 1 and a quick ratio of 0.8 to 1. Which of the following could help explain the divergence in the ratios from the beginning to the end of the year? (continued R6-Liquidity of Short...
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