Explain "frce cash flows. Why do managers like to retain free cash flows instead of distributing it to shareholders? Discuss what mechanisms may be used to solve this problem?

Q: How to incease profitability in a service company if Operating cash does not cover debt?

A: operating cash flows -  cash flows from the operations of the business are known as operating cash…

Q: How do I calculate a company’s free cash flow if it is all-equity financed?

A: In case the firm is fully equity financed, free cash flow = Cash flow free from all kind of claims =…

Q: Explain "free cash flows." Why do managers like to retain free cash flows instead of distributing it…

A: Free cash flows (FCF) equals the amount left with the company after the required payments to the…

Q: Even though profits may be strong and the balance sheet solid, some say cash is still the…

A: Cash is the lifeblood of a business and business needs to generate enough cash from its activities…

Q: True or false? Using the cash flow statement, as a financial control, is not necessary when your…

A: Step 1   A cash flow assessment is a crucial indicator of a company's health, profitability, and…

Q: All else the same, which of the following management decisions would help alleviate the problem of a…

A: To alleviate the problem of excess cash, company’s management can take following steps- Investment…

Q: Why might the riskiness of cash flow from the residual value of the real estate differ from the…

A: It is nothing but the salvage value or scrap value of an asset. It speaks to the measure of…

Q: Why would a company decide to pay investors cash? What are the two ways to give cash back to…

A: Cash is paid in terms of dividends.

Q: Why is it that the goal of financial management is maximization of shareholders’ wealth rather than…

A: Financial management is defined as the planning, organizing, directing, and also the controlling of…

Q: Calculate the present value and future value of an uneven cash flow showing how to value common…

A: The concept of the time value of money states that the current worth of money is more than its value…

Q: fers from Free Cash Flows (FCF) and discuss the types of businesses for which this differences will…

A: Difference between EBITDA and free cash flow : Analysts utilise a variety of measures to assess a…

Q: What rate do investors use to discount the capital gains and cash flows of firms?

A: Discounted cash flow estimates the present value of an asset by using projected cash flows.…

Q: If a company lowers its cash dividend payment, does that always send a bad signal? If not, provide…

A: Every company receives their capital in the form of equity or debt. Equity is from the shareholders…

Q: which m

A: Given: To explain the considerations of companies choosing a marketable security to investing in an…

Q: Explain how a company can be “profit rich, yet cash poor.”

A: Corporation: A corporation is a form of business entity that is incorporated through the state…

Q: Explain how profit maximization can help achieve wealth maximization in bank management?

A: The question is based on the concept of objective of financial management . Finance manager has…

Q: Why might smaller companies prefer to use techniques such as cash payback and accounting rate of…

A: Cash Payback: A simplified explanation is that the cash payback approach entails multiplying a…

Q: What is float? How do firms use float to increase cash managementefficiency?

A: Financially, the float consists of cash that is shortly measured twice as long as a deposit is…

Q: Why can it be misleading to use a firm's working capital to discuss cash flow without further…

A: Working capital and cash flows are the important aspects of an organization that helps an investor…

Q: What are the advantages/disadvantages of using the discounted cash flows method of estimating the…

A: Discounted cash flows method : Discounted cash flow method considers the time value of money in…

Q: C. Briefly explain the concept of Free Cash Flow and articulate how it can be employed by corporate…

A: The company will have revenue, and expenditure during the period. The expenses will be subtracted…

Q: Investors and creditors are looking for more than just profitability? What may be gleaned from the…

A: Introduction: We'll answer the first question because the exact one was not specified. Please ask a…

Q: Please explain why prudent financial management will maximize Shareholders’ wealth, in the following…

A: Financial management is a function in the business that is dealing with financial resources…

Q: How does the net present value (NPV) decision rule relate to the primary goal of financial…

A: Net present value is the profit or net gain we received from an investment. This investment is…

Q: Finance experts contend that the ultimate goal of a firm should be maximization of shareholder…

A: The concept of shareholder wealth maximizationShareholders are the owners of the company.…

Q: What would happen to a company if it ran out of cash? Explain the importance of good working capital…

A: Working capital is excess amout of current assets over current liabilities.  Cash conversation cycle…

Q: Which of the following is NOT a conclusion drawn from M&M's Propositions 1 and 2? a. Shareholder's…

A: M&M proposition states the value of company is calculated at present value of its future…

Q: What major advantage does a company that has positive free cash flow have over a  company that has…

A: Free cash flow : It is defined as a financial performance metric which shows how much funds are…

Q: subject to ethical

A: Maximizing shareholder wealth is the single or top priority for a company has led to a number of…

Q: a. Discuss the factors that are likely to influence the desired level of cash of a company

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Which of the following statements is NOT CORRECT? The corporate valuation model can be used both for…

A: Corporate valuation is a systematic process to find the true value based on financial data.  Most of…

Q: Practice : a: The computation of return on average investment ignores one characteristic of the…

A: Capital budgeting refers to the technique of evaluating a project for investing in it. It has…

Q: What is free cash flow, and how does it work? If you were an investor, why could you be more…

A: When all operational costs and capital expenditures have been met, free cash flows represent the…

Q: A negative Cash Flow to stockholder means?

A: A negative cash flow to Stockholder means a situation wherein cash paid to stockholder is less than…

Q: Explain the theory behind the free cash flow valuation approach. Why are the free cash flows value…

A: The free cash flows valuation approach will be a theory for determining a company's intrinsic value,…

Q: What might RR do to reduce its target cash balance without harming operations?

A: Target cash balance can be defined as the ideal cash level that a company seeks to hold in reserve…

Q: Which scenario would be considered the most favorable by shareholders of a company? Select one: a.…

A: The net earnings after all debt obligations, tax paid to government and dividend paid to preference…

Q: Can a firm have income without also having a positive cash flow? Explain.

A: Cash Flows are the inflows & outflows of cash in the business to meet the day to day activities.…

Q: Discuss the strength and weaknesses of cash-flow based valuation models. How do variations in the…

A: Cash flow based valuation models  Strengths : DCF depends, unlike most valuation models, on inflows…