Describe primary reasons that companies hold cash
Describe primary reasons that companies hold cash? Companies hold cash to make essential payments, to take benefit of opportunities as they arise, and to cover unforeseen emergencies.
What happens to the riskiness of portfolio if assets along with very low correlations (even negative correlations) are combined? How successfully diversification decreases risk based on the degree of correlation among the two variables in questi
Assume the market for widgets can be described by the given equations: Demand: P = 10 - Q &
Explain the primary advantage to a corporation of investing some of its funds within working capital? Through investing in working capital a firm gets the liquidity it require helping it to pay its bills. Therefore the risk of the firm is reduce
Why does money contain time value?Positive interest rates denote that money has time value. While one person lets another borrow money, the first person needs compensation in exchange for decreasing current consumption. The person who borr
Describe risks related with using a large amount of short-term financing for working capital? By using a large amount of short-term financing usually allows funds to be raised at a lower cost however raise the firm's risk.
Describe the factors affecting the option of a minimum cash balance amount. The minimum cash balance amount is find out by how easy it is to increase funds when needed, how predictable the cash flows are, and how risk averse managers are.
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Reversion: The return of the unused part of an appropriation to the fund from which the appropriation was made, usually two years (that is, four years for federal funds) after the last day of an appropriation’s accessibility period. The Budget A
Explain the investment opportunity schedule (IOS)? How does it help financial managers take business decisions? The investment opportunity schedule illustrates graphically proposed capital budgeting projects depicting the IRR and dollar amount
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