Disbursement float - Study guides, Class notes & Summaries

Company A Company B Market Value of Equity $700,000 $900,000 Market Value of Debt $300,000 $200,000 Cost of Equity 8% 10% Cost of Debt 1.5% 3% Tax Rate 30% 25% Based solely on their current weighted average cost of capital, which company should pursue an investment opportunity with an expected return of 7%? • Only Company B • Both Company A and Company B • Only Company A • Neither Company A nor Company B 2 Preparing a cash flow forecast helps a company to avoid __________. • opportunit...

Introduction to Finance - Milestone 4 questions well solved Jerome needs funding to help start a business selling school supplies. He uses a website that connects him directly with a lender who charges a below-market interest rate. What type of financing is Jerome using? Peer-to-peer lending Which inventory technique assumes that the most recently purchased inventory is sold first? LIFO 00:20 01:42 Farrah owns 500 shares of stock valued at $30/share in Company A. Af...

Principle of Finance Milestone 4 Sophia Course 1 When performing capital budgeting and considering replacement projects, one factor that must be considered is the potential __________ of equipment that is no longer needed. · taxation · depreciation · salvage value · sunk costs CONCEPT Cash Flow Analysis and Other Factors 2 According to the residual dividend model, what takes priority over distributing dividends? · Paying off debt · Increasing share price · Establishing a target payout rat...

Sophia Finance Milestone 4 1 Which of the following is an example of an operational risk for a company that manufactures automobiles? Rising interest rates that affect the terms of car loans, thereby decreasing demand Damage to completed cars held on a storage lot A state tax increase that makes buying and registering a car more expensive A national car rental agency backing out of a contract to buy a certain volume of new cars CONCEPT Risk and Capital Budgeting 2 Which of the following...

Principle of Finance Milestone 4 Sophia Course Answer Principle of Finance Milestone 4 Sophia Course 1 When performing capital budgeting and considering replacement projects, one factor that must be considered is the potential __________ of equipment that is no longer needed. · taxation · depreciation · salvage value · sunk costs CONCEPT Cash Flow Analysis and Other Factors 2 According to the residual dividend model, what takes priority over distributing dividends? · Paying off debt · Incr...

Company A Company B Market Value of Equity $700,000 $900,000 Market Value of Debt $300,000 $200,000 Cost of Equity 8% 10% Cost of Debt 1.5% 3% Tax Rate 30% 25% Based solely on their current weighted average cost of capital, which company should pursue an investment opportunity with an expected return of 7%? • Only Company B • Both Company A and Company B • Only Company A • Neither Company A nor Company B 2 Preparing a cash flow forecast helps a company to avoid __________. • opportunit...

When managing its cash, a company should make use of float to __________. make payments before they come due decrease the length of me for a payment to clear the bank set aside cash for future payments increase the length of the disbursement cycle CONCEPT Cash Management 2 Tom and Wendy are launching a life coaching business. They plan to have an equal say in any managerial business decisions and they plan to share any profits or losses. They are concerned about their exposure to liabil...

Principle of Finance Milestone 4 Sophia Course 1 When performing capital budgeting and considering replacement projects, one factor that must be considered is the potential __________ of equipment that is no longer needed. · taxation · depreciation · salvage value · sunk costs CONCEPT Cash Flow Analysis and Other Factors 2 According to the residual dividend model, what takes priority over distributing dividends? · Paying off debt · Increasing share price · Establishing a target payout rat...

Sophia Principles of Finance Milestone 4 Questions & Answers 1 Which of the following is an example of an operational risk for a company that manufactures automobiles? Rising interest rates that affect the terms of car loans, thereby decreasing demand Damage to completed cars held on a storage lot A state tax increase that makes buying and registering a car more expensive A national car rental agency backing out of a contract to buy a certain volume of new cars CONCEPT Risk and Capital...

FIN/ 370 FINAL EXAM--- 100% CORRECT 1. Which financial statement reports the amounts of cash that the firm generated and distributed during a particular time period? statement of retained earnings Income statement Statement of cash flows Balance sheet 2. Which of these provide a forum in which demanders of funds raise funds by issuing new financial instruments, such as stocks and bonds? Money markets Investment banks Primary markets Secondary markets 3. The top ...