Essentials of Corporate Finance (10th Edition)

Chapter 17

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The transaction motive is the availability of cash... more

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The company has to incur the opportunity cost for ... more

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The firm reduces the disbursement float in ... more

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The float creates excess or less availability of ... more

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Lockboxes are the special post office boxes used ... more

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The cash concentration bank collects the cash ... more

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The maximization of the disbursement float is not ... more

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The money market includes various securities which... more

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The components of credit policy are:Terms of ... more

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The term 3/45 net 90 signifies that the customers ... more

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The credit evaluation and scoring are based on the... more

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Inventory is classified under the following ... more

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The three points to be considered in to evaluate ... more

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Inventory management focuses to minimize the ... more

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Economic order quantity is used in the estimation ... more

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The just-in-time approach promotes holding minimum... more

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The total collection time consists of the ... more

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The components of credit policy are:Terms of sales... more

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Shortage cost is incurred to place an order for ... more

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$4,000 ; Calculate the average inventory by ... more

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The firm can hold excess cash when the firm ... more

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The excess cash can be invested in short-term ... more

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The opinion of creditors and stockholders is not ... more

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The companies hold the cash in huge amount because... more

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The dividend on the preferred stock provides a ... more

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The firm reduces the net disbursement float in ... more

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The difference in the book balance of $2 million ... more

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The company can hold the excess cash after ... more

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The benefit of using excess cash is the ... more

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The benefit of excess cash is used to repay the ... more

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The practice to use the disbursement float creates... more

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Trade credit is offered in open accounts. Credit ... more

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The carrying cost of granting credit or carrying ... more

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The credit evaluation and scoring are based on the... more

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The length of the credit period depends upon the ... more

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Inventory is classified as raw material, work-in-... more

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The inventory turnover will increase when the ... more

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The writing of the check creates a disbursement ... more

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The check deposit creates a collection float ... more

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Disbursement float is the amount of check written ... more

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$5,739.99 ; Calculate the average daily receipts ... more

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The receivables are $71,030.57. An increase in the... more

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$2,746,741.15 ; Calculate the receivables turnover... more

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$161,642.99 ; Calculate the daily credit sales by ... more

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Annual credit sales: $1,149,467Receivables ... more

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The inventory policy followed by the company is ... more

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The total carrying cost is $9,555. The restocking ... more

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The economic order quantity occurs when the ... more

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The number of orders to be placed is 72.80.  The ... more

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The credit rating of commercial papers of Company ... more

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The highest rates for AA nonfinancial commercial ... more

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EAR offered = 11.05%The cash balance and the ... more

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The EAR received: 63.49%The cash balance and ... more

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