FINANCIAL MANAGEMENT: THEORY AND PRACT
15th Edition
ISBN: 9781305632455
Author: BRIGHAM E. F.
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 2Q
Summary Introduction
To choose: The items which rises spontaneously with rises in sales.
Expert Solution & Answer
Explanation of Solution
Accrued wages, accounts payable and accrued taxes rise spontaneously. Retained earnings may perhaps rises based on the dividend payout policy and profitability.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Some liability and net worth items increase spontaneously with increases insales. Put a check (✓) by the following listed items that typically increasespontaneously:Accounts payable_____________________________
Some liability and net worth items increase spontaneously with increases insales. Put a check (✓) by the following listed items that typically increasespontaneously:Accrued taxes______________________
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.
Chapter 12 Solutions
FINANCIAL MANAGEMENT: THEORY AND PRACT
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- During a period of inflation, an account balance remains constant. With respect to this account, a purchasing power gain will be recognized if the account is a: a. Monetary liability b. Monetary asset c. Nonmonetary liability d. Nonmonetary assetarrow_forwardWhat are some possible negative signals when the product of the accounts receivable turnover ratio is lower (i.e., fewer times)?arrow_forward1.-The only effect of a change in the investment of accounts receivable is the extra interest to be paid to finance increases or the interest saved by lowering the investment. Yes or no?arrow_forward
- 16. What do you call for the likelihood of loss due to customers are not paying their amounts owing? a. Discount risk b. Credit risk c. Payment risk d. Loss riskarrow_forwardDuring a period of inflation, an account balance remains constant. With respect to this account, a purchasing power loss will be recognized if the account is a: a. Monetary asset b. Monetary liability c. Nonmonetary asset d. Nonmonetary liabilityarrow_forwardWhich of the following increases the cash conversion cycle? A.A decrease in inventory turnover B.An increase in the cash discount C.An increase in accounts payable D.A decrease in inventory levelarrow_forward
- When considering the discount rate to use for discounting cash flows of an entire company, we can use either the overall WACC or just the cost of one security (e.g., debt). True or False?arrow_forwardCredit spreads tend to widen as the credit cycle improves. Select one: True Falsearrow_forwardThe purpose of the inflation premium is to maintain the purchasing power of money while it is loaned to someone else. TTrueFFalse What kind of problem bad credit risks people pose to financial intermediaries ? AMoral hazard BNone of the above CAdverse Selection DFree-ridingarrow_forward
- A decrease in reserve requirements could lead to an A. increase in bank lending. B. increase in the money supply. C. increase in the discount rate. D. both A and B.arrow_forwardConcerning factoring, all of the following are true except? * factoring is done at a discount to the third party purchaser factoring speeds the inflow of cash to the seller of the receivables receivable lending is the process of factoring factoring discounts are often a function of the riskiness of the receivablesarrow_forwardAnswer the following questions: a. Find the profit of the investment b. Find share of the bank from the profit c. Find the weightage average in the three provided boxes d. Find the profit for each type of deposit e. Find the profit rate for each depositarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeEBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Financial Projections for Startups Basic Walkthrough; Author: Mike Lingle;https://www.youtube.com/watch?v=7avegQF4dxI;License: Standard youtube license