Which of the statements below is TRUE? A) The increase in working capital accounts necessary to support a project also provides for cost increases at the end of the project. B) An increase in working capital can be brought about by an increase in inventory. C) Decreases in accounts receivables constitute a use of cash flow because you are helping your customers finance their purchases. D) Decreases in accounts payable constitute a source of cash flow because you are using your suppliers to help finance your business operations.

Which of the statements below is TRUE? A) The increase in working capital accounts necessary to support a project also provides for cost increases at the end of the project. B) An increase in working capital can be brought about by an increase in inventory. C) Decreases in accounts receivables constitute a use of cash flow because you are helping your customers finance their purchases. D) Decreases in accounts payable constitute a source of cash flow because you are using your suppliers to help finance your business operations.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Which of the following would be most likely be included as part of free cash flows? The lost revenue that could have been used if a warehouse was leased out The cost of an already completed marketing study The interest that will be paid to debt holders to finance the project The salary paid to the firm's CEO To UN 스용 515
7. The internal rate of return (IRR) can best be described as: A. the discount rate at which a set of cash flows have a zero net present value B. the discount rate at which a set of cash flows have a positive net present value c. the rate which the business has to pay to raise finance for an investment the return required by the managers of the business D.
"As a firm's sales grow its current asset accounts tend to increase. For instance, as sales increase the firm's inventories increase and its level of accounts payable will increase, Thus, spontaneously generated funds will arise from transaction accounts that increase as sales increase." O True O False A Moving to another question will save this response. « < Question 3 of 40
How much is the gross benefit (annual return on the investment of increase in the average cash balance) of the lockbox system?Should the company make the investment and adopt the lockbox system? Yes or no
1. Kindly break down how you got terminal cashflow at the end of the project. 2. Explain how you arrived at Net Present Value. What is the formula used?
A. What is the incremental cash flows from switching credit policies? B. What is the cost of switching? C. What is your recommendation? D. What is the break-even sales increase? Interpret.
An advantage of this method is that it highlights how a capital investment can affect a company’s liquidity. Select one: a. Payback Method b. Accounting Rate of Return Method c. Time Value of Money d. Discounted Cash Flow Techniques. Need typed answer only.Please give answer within 45 minutes
Cash conversion cycle a. is longer if you decrease the level of your inventories. b. is longer if you increase the volume of your payables. c. is calculated in percentage. d. is shorter if customers are paying by cash (ceteris paribus).
be appropriate? Explain. 8.4 Average Accounting Return Concerning AAR: LO 2 Describe how the average accounting return is usually calculated and describe the information this measure provides about a sequence of cash flows. What is the AAR criterion decision rule? a. b. What are the problems associated with using the AAR as a means of evaluating a project's cash flows? What underlying feature of AAR is most troubling to you from a financial perspective? Does the AAR have any redeeming qualities?
The amount of time needed to recoup one's initial investment is referred to as the payback period, and it is also the amount of time required for an investor to reach the point when they are no longer losing money. Investments with shorter payback periods are considered more desirable, whereas those with longer payback periods are seen as less desirable. Imagine that you are the Chief Financial Officer. Critically evaluate the use of cash payback method (advantages and disadvantgaes) in determining the investment decisions with sufficient cash flow to ensure business sustainability in a competitive environment.
A decrease in accounts payable constitutes a/an _________ in net working capital and is considered a/an __________ to a project. Select one: a. increase; cash inflow b. increase; cash outflow c. decrease; cash inflow d. decrease; cash outflow e. increase; opportunity cost
If a firm wants to increase its working capital efficiency, it should: Increase its days inventory and days receivable and decrease days payable Decrease days inventory and increase days receivable and days payable Decrease days inventory, days receivable and days payable Decrease days inventory and days receivable and increase days payable Decrease cost of goods sold and interest expense

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