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How does a short-term cash flow crisis impact a firm's competitive strategy?
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- Can Retained Earnings grow too large? If so, what strategies might management take to reduce it?Practice : a: The computation of return on average investment ignores one characteristic of the earnings stream, which is considered in discounting cash flows. What is this characteristic? Why is it important? b: What are the disadvantages of evaluating an investment using payback period? Why might a company use this methodology despite these disadvantages?How can we estimate Risky Cash Flow?
- Which of the following is not a factor that a firm's management take into consideration when deciding on its short-term financing policy? Multiple Choice Short-term versus long-term investment opportunities. Maturities of its assets and liabilities. Behaviour of short-term rates versus long-term rates. Product mix demand. Liquidity needs.Which of the following is NOT related to (or contributes to) business risk? Remember that a company's activities have an effect on its business risk. Sales price variability. The extent to which operating costs are fixed. Demand variability. O Input price variability. O The extent to which interest rates on the firm's debt fluctuate.What is the relationship between the predictability fo a firm's cash inflows and its required level of net working capital? How are net working capital, liquify and risk of insolvency related?
- how do banks improve their net profit margin to increase Return on Equity? what are the risk implications ?What should a firm’s goal be regarding the cash conversion cycle,holding other things constant? Explain your answer.Why might stockholders be indifferent to whetheror not a firm reduces the volatility of its cash flows?