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q market condition affecting cost of capitalmarket condition if an investor is purchasing a security where the risk of the investment in significant
factors affecting cost of capital are elements in the business environment that cause a company cost of capital to be high and low figure below
q problems in assigning weightsproblems in assigning weights for determining the weighted average costs of capital weight has to assign to the
q problem in computation of retained earnings problem in computation of retained earnings it is sometimes argued that retained earning do not involve
q problems in computations of cost of retaining earningproblems in computations of cost of retaining earning it is sometimes argued that retained
q describe historical cost and future costshistorical cost and future costs another problem in the determine of cost of the capital arise on the
q problem in the determine of cost of the capitalconceptual controversies regarding the relationship between the cost of the capital and the capital
q define implicit cost and explicit costsimplicit cost and explicit costs the implicit cost is the rate of return associated with the best invests
q what do you mean by average cost and marginal costaverage cost and marginal cost the average cost is the combined cost as explain above but for the
1future cost and historical cost financial decision is based on the future cost and not on the historical cost the decision related to the future and
q importance of the cost of capital1 evaluating financial performance the actual profitability of the project is compared to the projected overall
q cost of capitalthe terms of cost of capital refers to the minimum rate of the return a firm must earn on its investment so that the market value of
q explain about money market mutual fundsmoney market mutual funds money market mutual funds mmmfs focus on short-term marketable securities such as
q show inter-corporate depositsinter-corporate deposits inter-corporate lendingborrowing or deposits icds is a popular short-term investment
q show certificates of depositscertificates of deposits certificate of deposits is papers issued by banks acknowledging fixed deposits for a
q what is commercial paperscommercial papers commercial papers cps are short-term unsecured securities issued by highly creditworthy large companies
q what do you mean by treasury billstreasury bills tbs are short-term government securities the usual practice in india is to sell treasury bills at
q basic objectives of cash managementthe basic objectives of cash management are two-fold1 to meet the cash disbursement needs payment schedule and 2
q what do you meant by yieldinvestment should be in such securities which yield the highest return however safety should not be sacrificed at the
q what is maturitymaturity the maturity period of the securities should be short otherwise the company might suffer losses on account of getting the
q what do you mean by marketabilitymarketability the firm must be able to sell its holdings and realize cash as and when required the securities must
investing surplus cash cash not required for temporary periods of short durations can be invested in near-cash assets ie marketable securities which
q determining optimum liquid balanceliquid balance balance of cash and marketable securities must be maintained at the optimum level it is the level
q security required in bank finance1 hypothecation under this arrangement the borrower is provided with working capital finance by the bank against
q what do you mean by letter of credita letter of credit is an arrangement whereby a bank helps its customer to obtain credit from its customers