What is the danger of applying one cost of capital to all proposed capital budgeting projects? Not all capital budgeting projects are of the same…

The most common meaning for the term working capital is the difference between current assets and current liabilities: In this usage, working capital is the…

Even though each component of the current accounts (each dollar of cash, each account receivable, each item of inventory, each account payable, etc.) turns over…

In what ways is the cash flow table used to organize the data for permanent working capital asset decisions similar to and different from the…

What is a project’s “net annual benefit?” Why is this measure used in evaluating permanent working capital asset decisions? Net annual benefit is the amount…

Discuss how a corporate treasurer allocates the firm’s cash balance. What are the factors taken into account in making the allocation? Corporate treasurers allocate a…

Even though accounting principles encourage us to treat a corporation as a “going concern,” many people are not comfortable with this assumption. Few companies survive…

Why is it of concern to the financial manager? Discuss the advantages and/or disadvantages to receivables float and payables float. Float is money that is…

A lock box-concentration banking system is a traditional method of reducing receivables float. A lock box is a post office box to which customers address…

When does a company move cash from its noninterest-bearing demand account to marketable securities? All companies face a tradeoff between their need for liquidity, which…